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GOPIO NEWS
SPECIAL BULLETIN
August 19, 2011
A Publication of the Global Organization of
People of Indian Origin (GOPIO) |
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Issue: X-11 |
August 19, 2011 |
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DEPT. OF TREASURY SAYS NO DEADLINE EXTENSION
FOR OVDI IN RESPONSE TO GOPIO'S LETTER TO SECRETARY GEITHNER
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In response to the letter delivered to
Treasury Secretary Timothy Geithner by GOPIO on June 27, 2011, the Department of
the Treasury has responded on as follows:
The 2011 Offshore Voluntary Disclosure Initiative (OVDI) "provides a way
for taxpayers with undeclared assets offshore to resolve their tax problems. The
terms of the OVDI require taxpayers to pay the following penalties:
- A 20 percent accuracy-related penalty under section
6662 of the Internal Revenue Code (Code);
- A failure-to-file penalty under section 6651 (a)(1)
of the Code;
- A failure-to-pay penalty under section 6651 (a)(2)
of the Code; and
- An offshore penalty equal to 25 percent of the
highest aggregate balance in foreign bank accounts and entities or the value of
foreign assets during the period covered by the voluntary disclosure in lieu of
all other penalties that may apply, including FBAR and offshore-related
information return penalties.
"The OVDI terms already lower the offshore penalty down to 12.5 percent or
5 percent in some circumstances. Further, under no circumstances will a taxpayer
have to pay a penalty greater than what he or she would otherwise be liable for
under the maximum penalties imposed under existing statutes. If the offshore
penalty is unacceptable to a taxpayer, he or she may opt out of the OVDI and
request that we refer the case for an examination of all relevant years and
issues."
In response to GOPIO request for the extension of deadline to December 31,
2011, the Department of the Treasury has responded in the same letter as
follows:
"At this time, we do not contemplate granting an across-the-board deadline
extension for all taxpayers. However, a specific taxpayer can request an
extension of the deadline (up to 90 days) to complete his or her submission if
the taxpayer can demonstrate a good faith attempt to fully comply with the OVDI
requirements on or before August 31, 2011. The request must be in writing and
must include a statement of the items that are missing, the reasons why, and the
steps he or she is taking to secure them".
In response to GOPIO's complaint that the OVDI has not been publicized in
ethnic newspapers and other community media in multiple languages, the
Department of the Treasury has responded in the same letter as follows:
"We have promoted OVDI awareness by posting information about the OVDI in
eight foreign languages, including Hindi, on IRS.GOV. We have also released
information through traditional media, both national and local, as well as
social media websites such as Twitter. We will continue this extensive outreach
effort as the August 31, 2011, deadline nears."
However, the Indian community groups are of the opinion that OVDI
announcement was not been published well within the new immigrant communities
who were affected by the new rules. The four organizations namely, Global
Organization of People of Indian Origin (GOPIO), National Federation of Indian
American Associations (NFIA), American Association of Physicians of Indian
Origin (AAPI) and Asian American Hotel Owners Association (AAHOA) along with
Federation of Indian Community Associations of Cleveland (FICA), Federation of
Indian Associations (FIA) of NY/NJ/CT have decided to continue their
collaborative efforts with the hope that the Department of Treasury may
reconsider and provide relief in respect of various demands put forth in the
July 19, 2011 letter submitted to the President of United States.
The coordination group has appealed to the Indian American community to
post note to the White House at http://www.whitehouse.gov/contact or write to your Congressman and
Senators.
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INDIAN AMERICAN COMMUNITY DELEGATION MEETS THE IRS OFFICIALS ON OVDI |
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delegation of Indian community representative under the aegis of the National
Indian American Coordinating Council met the Internal Revenue Service (IRS)
officials to convey community's concerns ans distress regarding the new Offshore
Voluntary Disclosure Initiative (OVDI) adn the way in which ti has been
implemented. The delegation headed by Dr. Thomas Abraham, Founder President and
Chairman Emeritus of the Global Organization of People of Indian Origin (GOPIO),
included Mr. Lal Motwani, President of the National Federation of Indian
American Associations (NFIA), Mr. Shailesh Patel, Director at Large of Asian
American Hotel Owners Association (AAHOA) and Dr. Maya Chadda of GOPIO and
Council on Foreign Relations.
The meeting at the IRS headquarters in Washington, DC was arranged by the office
of Congressman Steve LaTourette of Ohio. IRS was represented by Ms. Rosemary
Sereti, Director of International Individual Tax Compliance; Attorney Advisors
to Deputy Commissioner Ms. Jennifer Beth and Mr. David Vorley, and Legislative
Counsel Suzanne R. Sinno of the Office of the Legislative Affairs.
In the meeting the Indian community delegation stressed the following points:
First they stressed that their collective survey of the Indiana American
community revealed a very high level of distress verging on panic for the
following
Reasons.
1. Most have only recently found out that they are in violation of the
IRSrequirements of the voluntary disclosure of foreign accounts and
income.Information has been sketchy and almost no one knew what the procedure
wasto come under the 2011 amnesty program. Those who found out only recently are
leftwith no time to file before august 31 2011. Nor are they aware that they
need a clearance from the Treasury Department for entering the amnestyprogram.
The delegation made the IRS officials aware of this drawing on real lifeexamples
and explained why the community is distressed and confused.
2. People who are caught between the lack of information and lack of time arenot
willfully violating the tax law. The delegation in fact pointed out thatthere
were broadly two categories of people who are in this situation, thosewho have
sent money to help their extended families in India, supportingaging parents,
finance children's education and that of siblings and youngermembers of the
extended family. Transfer of money for these reasons wasnatural for the first
generation immigrants. Culturally Asian Americans, Indians in particular, are
intensely family oriented. The second categoryincluded people who have worked,
saved and are sending money in preparationof retirement. This usually takes the
form of property and alliedinvestments. These monies are also usually after tax
monies.
The delegation stressed
that the way in which the penalty is imposed, i.e. 25 percenton the highest
balance over the eight years span, was totally out ofproportion to the presumed
willful violation. Such a level of penulty itself violates theprinciple of
proportionality on which the US law rests. The penulty therefore violates the 8thamendment
of the US constitution and the case law precedents it has set. If the penalty
was reasonable, more tax payers will comply. It is obviously in the Interest of
the IRS to promote wider compliance of the tax laws.
3. The third point was about the way the IRS has implemented the
amnestyprogram. After entering the program, the tax payees or their accountantsonly deal with
agents who are given no power to separate willfulnon-compliance from innocent
non-compliance. They simply administer the lawand impose punishing penalty. Even
If the tax payer has genuine groundsfor failing to
disclose, the agents are not allowed to use their discretion. This will punish
the innocent, in fact the bulk of the community who are law abiding citizens and
have regularly paid their dues to the IRS.
Photo above: Indian American community
Representatives meet with IRS officials
on the OVDI issue. From L. to R.: Shailesh Patel, David Vorley, Rosemary Sereti, Jennifer Beth, Lal
Motwani, Dr. Maya Chadda and Dr. ThomasAbraham
The delegation suggested that as a first and immediate step, the IRS can take a
step to empower the agents with discretionary judgement.
The delegation also shared the fear of being singled out among the groups
astargets of IRS inquiry.
They suggested that penalty should be levied on non-reported income and notfor
non-disclosure.
The IRS responded that for those who believe
themselves to be innocent of violation have the choice of opting out of OVDI but
they would still have to make full disclosure under the August 31 2011 amnesty
program. That would expose them to scrutiny but if their case was genuine, (for
example the delegation pointed out to the IRS officials that if the interest
income during the process of supporting children/siblings education and of
buying a retirement home is small amount compared to the estimated penalty),
they may escape penalty or pay a much smaller percentage of penalty. In the
simpler cases of non-disclosure, the tax payer can represent themselves to the
agent after filing all amended statements during the opt-out procedure.
For more information: Contact the following
national organizations:
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Global Organization of People of Indian Origin
GOPIO International, New York, NY
www.gopio.net
Contact: Inder Singh, Chairman
Tel: 1-818 708-3885, E-mail: gopio-intl@sbcglobal.net
National Federation of Indian American Associations (NFIA), Bellrose, NY
www.nfia.net
Contact: Lal K. Motwani,
President
Tel: 1-646 724-1153, E-Mail: lmotwani@verizon.net
American Association of Physicians of Indian Origin
(AAPI), Oak Brook, IL
www.aapiusa.org
Contact: Sunita Kanumury, MD, President
Tel: 1-630 990-2277, E-mail: info@aapiusa.org
Asian American Hotel Owners Association
(AAHOA), Atlanta, GA
www.aahoa.com
Contact: Hemant D. Patel, Chairman &
Fred Schwartz, President
Tel: 1-404 816-5759, E-mail: info@aahoa.com
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GOPIO LIFE MEMBERSHIP AND CHAPTER FORMATION |
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GOPIO is a non-partisan, non-sectarian global organization with chapters in
several countries, actively promoting the interests of people of Indian origin
worldwide by monitoring and addressing current critical issues of concern, and
by enhancing cooperation and communication between groups of Indians living in
various countries.
GOPIO Individual Life membership is open to
all who believe in the mission of GOPIO. The one- time fee is $5,000 for
Platinum Life Membership, $2,500 for Gold Life Membership and $1,500 Silver Life
Membership and half the amount for each category for those from developing
countries and India.
GOPIO is looking forward to opening chapters
in all major cities of the world so as to network people of Indian origin all
over the world. If you do not have chapter in your city, please visit GOPIO
website (www.gopio.net)
GOPIO Chairman - Inder Singh, Tarzana,
California, USA, Tel: 818-708-3885, E-mail: gopio-intl@sbcglobal.net
GOPIO President - Lord Daljit Rana, UK,
Tel: +44 28-9807-8787, Email:president.gopiointl@googlemail.com
GOPIO Executive Vice President - Ashook
Ramsaran, Fresh Meadows, New York City, Tel: 718/939-8194, E-mail: ramsaran@aol.com
To become a Life member of GOPIO, one can sign up online at
http://gopio.net/online_membership.htm or fill up the form and send it with a check to: GOPIO International, PO Box 560117, New York NY
11356, USA.
and get details of chapter initiation (visit http://www.gopio.net/chapter_initiative.htm). Process
involves sending a letter of intent to start a chapter by a committee of five
people or more. For
more information, contact: |
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EDITORIAL BOARD |
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Chief Editor: Dr. Thomas Abraham, Founder
President and Chairman Emeritus, GOPIO (Stamford, CT, USA)
Editors: Ashook Ramsaran, GOPIO Executive
Vice President (New York, USA)
Webmasters: Prashant Gupta (Hyderabad, India) and Abu
Thomas (New Rochelle, NY, USA)
GOPIO NEWS welcomes NRI/PIO related news
items from all over the world. Be a volunteer correspondent or reporter. Contact
Dr. Thomas Abraham, Tel: 203-329-8010, E-mail: gopio@optonline.net.
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