The IRS has announced that it will shut down the Offshore Voluntary Disclosure Program (OVDP) on September 28, 2018. The OVDP, which started in 2009, allows taxpayers to voluntarily disclose offshore bank accounts and assets that were not originally reported on their tax returns and Reports of Foreign Bank & Financial Accounts (FBARs). Thousands of U.S. taxpayers have used the program in recent years to report their assets to the IRS, paying civil penalties in exchange for amnesty from criminal prosecution.
In its announcement, the IRS notes that it will continue to focus its investigative and enforcement efforts on offshore tax avoidance. Since 2009, the IRS has vigorously pursued taxpayers with undisclosed foreign assets, indicting 1,545 taxpayers on criminal charges related to international tax avoidance.
The IRS plans to continue the Streamlined Filing Compliance Procedures, a separate voluntary disclosure program with stricter eligibility guidelines that require taxpayers to certify that their failure to report offshore assets was “not willful”. Unfortunately for many U.S. taxpayers, this standard of non-willfulness can be difficult to prove and is often unavailable to those who do not strictly fit the criteria.
Taxpayers who wish to avoid the risk of IRS international tax enforcement need to move quickly to take advantage of the OVDP. If you have unreported offshore assets, contact the experienced international tax attorneys at Daniel Rosefelt & Associates as soon as possible to find out your legal options and potentially take advantage of the OVDP – before it’s too late!