IRS Announces End To Offshore Voluntary Disclosure Program
The IRS has announced an end to its Offshore Voluntary Disclosure Program (OVDP). The program has been in place since 2014. US taxpayers with undisclosed foreign financial assets still have time to take advantage of the OVDP until September 28, 2018. In order to participate in the program, submissions must be received or postmarked by September 28, 2018 and may not be partial, incomplete or placeholder submissions.
The IRS currently has three programs available to disclose previously unreported foreign financial assets. Each program has unique eligibility requirements, penalty determinations, and protections. Taxpayers should consider each program to determine what is available to them and make a determination as which program will best suit their particular situation.
The OVDP provides taxpayers an opportunity to come forward and disclose income related to foreign assets, disclose foreign assets, pay taxes and reduced penalties while avoiding criminal prosecution. It is the only program available that will provide protection against criminal charges.
Streamlined Filing Compliance Procedures
This program is still available, there have not been any announcements from the IRS regarding closing this program at this time. This program is designed to allow individual taxpayers a simplified way to file amended and/or delinquent returns and pay any tax due to reduced penalties. This option requires a taxpayer to certify that the failure to report the income and file the required returns was not willful conduct. The penalties under this program are different for US taxpayers who reside in the US versus those who reside outside the US. There is no criminal liability protection with this program.
Delinquent Form Filing Procedures – Report of Foreign Bank and Financial Accounts (FBAR) and International Information Return Submission Procedures
This program allows eligible taxpayers to file delinquent international forms without incurring a penalty when the taxpayer has reasonable cause. There is no criminal liability protection with this program.
More detailed information regarding these programs can be found at https://www.irs.gov.
The use of the OVDP requires a complete submission no later than September 28, 2018. Information gathering can be time-consuming. If you believe that you may have unreported foreign assets, we recommend you contact a tax advisor that is knowledgeable in international reporting requirements immediately to discuss your situation and the options available.