In a recent news release the Internal Revenue Service has stated that its Offshore Voluntary Disclosure Program (OVDP) will remain open for an indefinite period or until it announces otherwise. Furthermore it cautioned that avoiding U.S. taxes by hiding money or assets in unreported offshore accounts remains on its list of tax scams and cautioned that illegal scams can lead to significant penalties, interest and possible criminal prosecution.
On March 26, 2009, the IRS announced its first OVDP program, a form of a tax amnesty program. It permitted taxpayers with unreported foreign accounts to avoid criminal charges and pay reduced civil penalties by making a voluntary disclosure to the IRS. This original OVDP ran through October 15, 2009. Thereafter the program has been extended in early 2011, closing in September 2011, reopening in 2012.
Finally the IRS announced changes to the 2012 that took effect on July 1, 2014.
Since the opening of the OVDP, there have been more than 50,000 disclosures, resulting in the collection of more than $7 billion.
Furthermore, the IRS stated that the thousands of offshore related civil audits that have been conducted have produced tens of millions of dollars. And its pursuit of criminal charges have lead to billions of dollars in criminal fines and restitutions.
Unlike previous programs, the 2012 OVDP does NOT impose a deadline by which taxpayers must make a voluntary disclosure to be eligible for avoiding criminal prosecution and pay reduced penalties- that is its open ended. But according to IR 2015-09 the IRS declares that the OVDP will remain open for an “indefinite period until otherwise announced.”
Over the years numerous individuals have been identified by hiding income in offshore banks, brokerage accounts, or nominee entities and then using debit cards, credit cards, or wire transfers to access funds. Others have used foreign trusts , employee-leasing schemes, private annuities, or insurance plans for the same purpose.
Even if there are legitimate reasons for maintaining an offshore account, taxpayers must comply with certain filing requirements. Failure to comply could result in penalties, interest, and possible criminal prosecution.
Tens of thousands of individuals have come forward voluntarily to disclose their foreign financial accounts since 2009, taking advantage of the special opportunities to comply with the U.S. tax system and resolve their tax obligations. The provisions of the Foreign Account Tax Compliance Act (FACTA) that are being phased in over the next few years make hiding income offshore increasingly more difficult.
If you should have a topic that you would like me to discuss or if you should have a question, please feel free to call 239.403.4410 or e-mail me at firstname.lastname@example.org.
An enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere
to a stringent code of ethics.