IRS to Eliminate Voluntary Offshore Disclosure Program by Arthur Dichter, JD
Posted on April 10, 2018 by Arthur Dichter
Taxpayers have until Sept. 28, 2018, to avoid criminal prosecution and steep penalties when they coming forward voluntarily and share with the IRS previously undisclosed foreign financial assets. The IRS announced that on that date it will end the Offshore Voluntary Disclosure Program (OVDP) that it implemented to encourage reticent taxpayers to come into compliance with U.S. laws and pay their fair share of U.S. taxes.
The IRS first introduced an OVDP in 2009 to allow noncompliant taxpayers to come forward voluntarily to resolve their unreported income and assets. Consequently, more than 56,000 taxpayers have participated in the program and paid taxes, interest and penalties in excess of $11 billion. The agency reissued and updated the program several times, as recently as 2014, when the penalty for unreported assets held in certain foreign financial institutions investigated by the Justice Department was substantially increased.
Eligible taxpayers who unwillingly and unintentionally failed to disclose their foreign income and foreign assets may continue to use the Streamlined Filing Compliance Procedures (SFCP) as well as Delinquent International Information Return and Delinquent Foreign Bank and Financial Account (FBAR) Filing Procedures to meet their tax reporting obligations. For now, these programs remain in effect indefinitely. However, the IRS may choose to terminate them at any time.
The advisors and accountants with Berkowitz Pollack Brant work with domestic and foreign individuals and businesses to comply with international tax laws, maximize tax efficiency and reduce unnecessary compliance costs.
About the Author: Arthur Dichter, JD, is a director of International Tax Services with Berkowitz Pollack Brant, where he works with multi-national businesses and high-net worth foreign individuals to structure their assets and build wealth in compliance with U.S. and foreign income, estate and gift tax laws. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or via email at email@example.com.
Information contained in this article is subject to change based on further interpretation of tax laws and subsequent guidance issued by the Internal Revenue Service.