Latest News Release from the IRS targets Overseas Taxpayers

2011 Offshore Voluntary Disclosure Initiative (OVDI)

IRS has just announced on February 8, a new initiative to provide another opportunity to taxpayers who are still hiding money offshore to come forward and settle their tax obligations with their government. The IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative in order to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available only through Aug. 31, 2011.

The 2011 initiative has a higher penalty rate than the IRS’s previous voluntary disclosure program, which ended on Oct. 15, 2009, but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk IRS detection and possible criminal prosecution. In addition, the 2011 initiative includes new guidelines to provide fairness to people with smaller amounts of undisclosed assets or unusual situations.

Please visit the IRS website:

• Second Special Voluntary Disclosure Initiative Opens; Those Hiding Assets Offshore Face Aug. 31 deadline


• 2011 Offshore Voluntary Disclosure Initiative (OVDI)


• More details on the 2011 initiative


• Contact points, mailing addresses


• OVDI deadlines

The Internal Revenue Service (IRS) office serving all U.S. taxpayers living or working overseas is located in Austin, Texas. This office provides U.S. Federal tax assistance to Americans in Japan, and is also the destination for all returns filed from abroad.

The IRS Home Page, www.irs.gov, provides a lot of useful information for taxpayers and should be your first stop for tax questions and forms. In particular, the IIRS Publication, 4732, Federal Tax Information for U.S. Taxpayers Living Abroad and IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad are invaluable resources for anyone living abroad or with income from a foreign source.

One point that all international taxpayers should keep in mind is that the United States taxes its citizens on their worldwide income. Even if you are eligible to exclude a certain amount (or all) of your earned income in a given year, you must file a U.S. tax return in order to claim that exclusion.

Questions about U.S. state taxes and/or Japanese taxes should be directed to the appropriate agencies. Neither the IRS nor the Embassy can advise you or provide forms for U.S. state or Japanese taxes. More information about Japanese tax issues for foreign residents of Japan is available online here.

Please choose a topic:

• Contacting the IRS
• Obtain Forms
• IRS Information for U.S. Citizens and Resident Aliens Abroad
• Where to File
• Where is my Refund?
• Individual Taxpayer Identification Numbers (ITINs)
• Reporting Rates of Exchange
• List of Tax Preparers
• Copies/Transcripts of Previous Tax Returns
• Electronic Payment Website
• Urgent Tax Needs
• Tax Scams
• Identity Theft and Your Tax Records

Unfortunately, neither the Embassy in Tokyo nor any of our Consulates in Japan can answer tax-related questions. Please address questions to the I.R.S. directly. Click here for further information.

• Tax forms are available by mail from the IRS or online.
• U.S. military personnel can pick up tax forms from their unit tax advisor or from many base libraries. They can also get information on-line.
• Most forms are also available on DVD as "Publication 1796." You can order a copy of this DVD online.

IRS Information for U.S. Citizens and Resident Aliens Abroad:

The IRS website has a lot of information that will prove valuable to the overseas residents. Click here for a list of topics of interest to overseas residents.

Please click here for information on where to file.

The IRS web site enables you to check where your refund is. Click here to start.

You must express the amounts you report on your U.S. tax return in U.S. dollars. If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U.S. dollars. How you do this depends on your functional currency. Your functional currency generally is the U.S. dollar unless you are required to use the currency of a foreign country. An exchange rate is the rate at which one currency may be converted into another, also called rate of exchange of foreign exchange rate or currency exchange rate.

To read more about exchange rates on the IRS web site, please go here. The IRS will not post an exchange rate schedule on its website. Instead, you may use the U.S. Treasury rate from Financial Management Service (FMS) or exchange rates listed on the Federal Reserve website.

Alternatively you may research external resources that provide currency exchange rates, such as www.oanda.com, www.xe.com, and www.x-rates.com.

Social Security Numbers are only available to American Citizens and Legal Permanent Residents (LPRs, or “Green Card” holders) and to noncitizens who have permission to work in the U.S. or require an SSN in order to receive certain U.S. federal benefits.

The Individual Taxpayer Identification Number (ITIN) was created for use as a tax reporting number for those taxpayers who do not qualify for Social Security Numbers. The ITIN is for tax purposes only. This number is not valid as personal identification, and does not imply or in any way provide legal status in the U.S. or entitle holders to work in the U.S. For more information about the purpose, legitimate uses, and application process for the ITIN, please consult "Understanding Your IRS ITIN."

How to Apply for an ITIN

Complete IRS form W-7, available at www.irs.gov, or at www.irs.gov/pub/irs-pdf/fw7.pdf. All new ITIN applicants should use the January 2008 revision of Form W-7.

Obtain a certified copy of your passport at the Embassy or one of our Consulates as a notarial service. The cost is US$50. Please click here for opening hours and details. You must apply in person with your passport.

Check the instructions with form W-7 for additional filing requirements, such as the need to include original, completed tax returns. Each applicant will have to show a federal tax purpose for seeking an ITIN, either by attaching a federal tax return to Form W-7 or providing documents that support an exception to the requirement to file a return. Exceptions are listed in the Form W-7 instructions.

Mail the completed form, certified copy of your passport and other documents to:

IRS
ITIN Operation
PO Box 149342
Austin, Texas 78714-9342

Tel. 215-516-2000

Processing time for an ITIN is usually four to six weeks.

To pay your taxes electronically online, please click here.

The Taxpayer Advocate Office may also provide answers to your urgent tax needs. Click here for contact information.

The U.S. Department of the Treasury and the Internal Revenue Service warn taxpayers of an e-mail-based scheme that attempts to trick taxpayers into revealing personal information such as social security numbers, driver's license information and bank and credit card numbers.

In this ploy, unsuspecting consumers receive an e-mail, claiming they are under investigation for tax fraud and are subject to prosecution. The e-mail informs recipients they can "help" the investigation by providing "real" information and directs them to an official-looking web site, "deptreas.org/irs/7634//", where detailed personal information must be provided to dispute the charge.

Identity thieves can use an individual's personal data to take over their financial accounts, run up charges on their credit cards, apply for loans, credit cards or other services in the victim's name and file fraudulent tax returns.

At the request of the IRS and the Treasury Inspector General for Tax Administration (TIGTA), the Internet service provider that was hosting the web site has shut the site down. The scheme is being investigated by TIGTA, which addresses threats to federal tax administration. The bogus IRS web page and the e-mail in this instance contained several grammatical errors, rendering them immediately suspect. However, new versions of the scam could surface in the future, including more effectively-written text and a different destination web site.

The IRS does not use e-mail to contact taxpayers about issues related to their accounts. Official taxpayer contact usually includes a letter on IRS stationery in an IRS envelope. IRS letters also contain a contact phone number.

Taxpayers who believe they have received suspect communication are encouraged to contact TIGTA through www.treas.gov/tigta. Additional information on identity theft and other fraud may be found on this website and this website.

The Embassy and our Consulates do not provide assistance with Japanese taxes.

You can find information in English, as well as many of the necessary forms, at www.nta.go.jp/taxanswer/english/gaikoku.htm.

You can also contact the Foreign Section of the Tokyo Regional Tax Bureau at 03-3216-6811.