Why should taxpayers make a voluntary disclosure?

The IRS has stated that, "Taxpayers with undisclosed foreign accounts or entities should make a voluntary disclosure because it enables them to become compliant, avoid substantial civil penalties and generally eliminate the risk of criminal prosecution. Making a voluntary disclosure also provides the opportunity to calculate, with a reasonable degree of certainty, the total cost of resolving all offshore tax issues.

Taxpayers who do not submit a voluntary disclosure run the risk of detection by the IRS and the imposition of substantial penalties, including the fraud penalty and foreign information return penalties, and an increased risk of criminal prosecution. The IRS remains actively engaged in ferreting out the identities of those with undisclosed foreign accounts. Moreover, increasingly this information is available to the IRS under tax treaties, through submissions by whistleblowers, and will become more available as the Foreign Account Tax Compliance Act (FATCA) and Foreign Financial Asset Reporting (new IRC § 6038D) become effective."

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Keogh & 401k

AskTaxGuru.com Junior Member, hanna, asked:

Hi. I have a keogh account in which I am making the maximum contribution. This year, I was hired by a new employer and plan to contribute the maximum to my 401(k) account. I understand that these two accounts are defined contribution plans. I'm unclear, however, on if I should be treating these two accounts as one account to figure out my deduction limit or if I can take a deduction for the contributions made to the account with my new employer and an additional deduction for contributions to my self-employed plan.

Any advice will be much appreciated!