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Contact:
Christine Bucan
Pantín/Beber Silverstein Public Relations
305-929-9723 or christine@thinkbsg.com
IRS RESPONDS TO DIPLOMATIC PRESSURE
--Extends deadline to qualify for tax settlement--
MIAMI, Fla., March 26, 2007 -- The IRS has announced that it is providing a further extension, until June 30, 2007, for U.S. citizen and legal permanent resident employees of foreign embassies, foreign consular offices and international organizations to participate in a one-time settlement initiative to resolve outstanding tax matters.
The IRS estimates that as many as half of these employees subject to U.S. tax either fail to report their wages, claim deductions they are not entitled to, incorrectly establish SEP/IRA retirement plans, fail to pay self-employment tax or fail to file tax returns at all.
According to a press release issued by the IRS, several embassies had requested the extension. This is the second extension granted by the IRS -- the original deadline of Feb. 20 had been extended to March 30.
"The only other time the IRS has postponed tax filings was after Hurricane Katrina," said Benjamin Bohlmann, a partner at Miami-based accounting firm Mallah Furman. "It's very interesting how diplomatic pressure has shaped this issue."
Mallah Furman, the accounting firm for the South Florida Consular Corps., is working with consulates to educate employees and encourage voluntary cooperation. There are some 60 consular offices and 20 foreign trade offices in South Florida with employees that may qualify for the settlement initiative.
In addition to the extension, Bohlmann said the IRS has changed the terms of the settlement to make it more favorable for taxpayers. Participants in the settlement will not be required to provide 2003 tax returns, which was previously part of the settlement eligibility requirement. Also, participants with erroneously established SEP/IRA plans will not be required to distribute amounts contributed to these SEP/IRAs for tax years prior to 2004.
"The IRS is encouraging taxpayers to join the settlement initiative and avoid audits and penalties which could prove costly," said Bohlmann. "These people have failed to file and pay taxes and the IRS wants them to come in from the cold."
About Mallah Furman:
Established in 1960, Mallah Furman now ranks as the 9th largest accounting firm in South Florida. The Firm provides strategic financial services to South Florida businesses in a broad spectrum of industries. For more information, please visit the Firm's website at www.mallahfurman.com.
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