On September 4, 2018, the Internal Revenue Service issued a reminder that taxpayers with undisclosed foreign financial assets have until September 28, 2018, to file a disclosure under the Offshore Voluntary Disclosure Program (OVDP).
The OVDP launched in 2009 as a means for taxpayers to voluntarily past noncompliance related to unreported foreign income or foreign financial assets and failure to file foreign information returns, such as the FBAR. Since 2009, more than 56,000 taxpayers have filed disclosures, paying a total of $11.1 billion in back taxes, interest, and penalties. The number of disclosures under the OVDP peaked in 2011, when approximately 18,000 people came forward, and has steadily declined, with only approximately 600 disclosures in 2017.
Although the OVDP is coming to an end, the IRS has made clear that it intends to continue combating offshore tax avoidance and evasion, using whistleblower leads, civil examination, and criminal prosecution. The IRS has indicated that it will maintain a pathway for taxpayers who may have committed criminal acts to voluntarily disclose their past activities and come into compliance, but has yet to announce specific procedures.
The Streamlined Filing Compliance Procedures, a separate program designed for taxpayers who may have been unaware of their filing obligations, will remain in effect for the time being. The IRS has indicated, however, that it may end this program at some point, as well.
If you have unreported foreign financial assets, contact the experienced international tax attorneys at Daniel Rosefelt & Associates, LLC, as soon as possible to review your legal options and potentially take advantage of the IRS disclosure programs while you still can.