The effect of foreign currency in accounting Essay

The effect of foreign currency in accounting - Essay Example It is applicable to individual persons as well as corporate entities. The disclosure procedure includes the attachment of an additional document alongside the individual’s income tax return form. Failure to disclose the proper amount or the exclusion of any particular asset from the reporting can result in stringent fines. The minimum penalty that is applicable is $10,000. After the initial penalty is charged, there is a grace period of 90 days before incremental charges start to accrue. These charges apply at a rate of $10,000 for every 30 days gone by without the proper rectification. This however is applicable after the 90 days grace period is over. Additional penalties have been declared for gross negligence amounting to 40% of the amount misrepresented or omitted without criminal intent. This is a spike of 100%, moving from 20% of the gross to 40% of the gross. A key note which is beneficial for the IRS and not so beneficial for the tax payer is that the statute of limita tions on performing audits of taxpayers has been extended two fold to 6 years. Previously, the IRS authorities only had the right to investigate the revenue generation of people and companies up to a maximum period of 3 years prior.