In 2014, the IRS created the current Offshore Voluntary Disclosure Program (OVDP). This program was set up to allow Taxpayers with foreign financial accounts and assets to come forward voluntarily so that they could mitigate the risk of potential criminal liability and civil penalties due to willful failure to report foreign financial assets. This program has now been set to sunset on September 28, 2018.
In 2012, the IRS announced that they had already collected $4.4 billion through OVDI programs. Numbers have declined and 2017 resulted in only 600 disclosures. According to the IRS Commissioner, “Taxpayers have had several years to come into compliance with U.S. tax laws under this program. All along, we have been clear that we would close the program at the appropriate time, and we have reached that point. Those who still wish to come forward have time to do so.”
Per the IRS: “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.”
Generally, if a Taxpayer has offshore accounts or assets, in addition to the tax filing requirements found in the Foreign Account Tax Compliance Act (FATCA) and other federal laws, Taxpayers also have an obligation to report this via FBAR (a Report of Foreign Bank and Financial Accounts). If this has not been done, those Taxpayers should explore the advantages of becoming compliant via the OVDP, and now with an end date in sight, should do so quickly.
If YOU are interested in exploring your opportunities to participate in the OVDP before the September 28, 2018 deadline, contact Bryson Law Firm, LLC today.