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Offshore Voluntary Disclosure Program Ending for Undisclosed Offshore Accounts Protection 

Posted by Concannon Miller on Thu, Mar 29, 2018

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international money.jpgThe Offshore Voluntary Disclosure Program ends Sept. 28, the IRS announced this month.

OVDP is a voluntary disclosure program specifically designed for taxpayers with exposure to potential criminal liability and/or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due in respect of those assets. OVDP is an option that offers protection from criminal liability and terms for resolving civil tax and penalty obligations.

The IRS has warned for several years it would be ending the Offshore Voluntary Disclosure Program.

The OVDP requires the taxpayer to pay all back taxes, interest and penalties for all the years in the disclosure period. In addition, the IRS also imposes an OVDP penalty that is generally 27.5% of the highest aggregate value of unreported OVDP assets for the years at issue (50% if it is public information that the foreign financial institution with the taxpayer’s assets is under investigation or is cooperating with the IRS or Department of Justice.)

The OVDP program is not available to taxpayers if the IRS has already initiated a civil examination or criminal investigation of the taxpayer. Please contact us before September if you’re considering applying for the Offshore Voluntary Disclosure Program.

There also are several other options for U.S. taxpayers with undisclosed offshore accounts. Each program offers advantages and disadvantages.

You can read details about your various options in this previous article: Relief From Foreign Bank Account and Foreign Information Reporting Failures

The IRS also warned last week it may end another of the options, the Streamlined Filing Compliance Procedures. These options are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part.

You can read more about the qualifications and benefits of the Streamlined Filing Compliance Procedures here. Until announced otherwise, they remain an option for individual taxpayers with undisclosed offshore accounts.

There is no “one size fits all” solution to a taxpayer caught up with undeclared foreign assets or unfiled foreign information returns. We strongly advise those needing assistance contact us before trying to undertake any of these options to ensure compliance.

Topics: International Tax

Concannon Miller’s unique, holistic and intimate approach to financial health sets us apart from smaller CPA firms with more limited resources as well as mega firms where mid-sized clients struggle for attention. Contact us here to talk about improving your business.

This communication is designed to provide accurate and authoritative information in regard to the subject matter covered at the time it was published. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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