In an effort to reel in taxpayers with illegal overseas accounts, the agency has launched initiatives that waive certain penalties for taxpayers who come clean. This year, the IRS introduced a program that gives taxpayers a reduction in penalties -- and no jail time -- if they fess up to any undisclosed overseas accounts for an indefinite window of time.
The agency also introduced a new form and filing requirements for reporting foreign assets this year. In addition to reporting any foreign bank accounts holding more than $10,000, you now also have to report any foreign assets -- including pension funds and foreign stocks -- totaling more than $50,000. Failing to report such assets will result in a $10,000 penalty, and any underpayments of tax on them will be subject to an additional penalty of 40% of the amount owed.
If the IRS has any hunch that you are not reporting an offshore account, you're in serious trouble. "The safety people thought they may have had offshore isn't so safe anymore," said Blank Rome's Comisky. "It's time to come in from the cold."
From pet pigs to Playboy magazines, here are some of the most outlandish deductions taxpayers have tried to slip past the IRS.
