In 2009, the IRS launched a voluntary disclosure program for taxpayers affiliated with the United States who had undeclared offshore investment accounts. The voluntary disclosure program was intended to encourage U.S. affiliated taxpayers to come forward, report their accounts voluntarily and pay a reduced penalty. Taxpayers who came forward would also be protected from criminal prosecution if they were eligible to participate in the voluntary disclosure program.
The program and penalties have gone through several iterations since the first voluntary disclosure program for offshore investors was put into place by the IRS in 2009. The programs have also been a major success and have made it possible for many people with offshore accounts to resolve tax issues with the IRS. Now, however, the IRS has announced that the Offshore Voluntary Disclosure Program (OVDP) is coming to a close.
If you have undeclared offshore accounts, you have a very limited time to act if you want to take part in OVDP. However, before you decide on the right course of action for you, you should talk with a Washington DC tax evasion attorney for help. There are risks to participation and you want to ensure that voluntarily disclosing your offshore accounts through OVDP would be beneficial in your particular situation. Consulting an experienced OVDP attorney is vital when disclosing foreign accounts to prevent any inadvertent mistakes or crucial information from being included that may result in potential penalties.
OVDP Is Coming to an End
Since the first version of the voluntary disclosure program was launched by the IRS in 2009, the IRS has collected approximately $11.1 billion from more than 56,000 U.S. affiliated taxpayers who participated in the amnesty program.
This money came from the back taxes owed by offshore investors, as well as penalties and interest that taxpayers were required to pay to participate in OVDP. While OVDP lessened penalties compared with the potential financial costs if the IRS found your offshore accounts on its own and took action, obviously the costs of participation in OVDP are still substantial.
While OVDP proved popular when it was established, the number of people taking advantage of the program has waned over time. In 2011, a total of 18,000 people voluntarily reported their offshore accounts. In 2017, just 600 people participated in the revised OVDP that was put into place in 2014.
The IRS indicated that it never intended for OVDP to last forever, and it will be closing the voluntary disclosure program effective September 28, 2018. The IRS provided this advance notice so any taxpayers who have offshore investments that remain undeclared will have time to come forward and make their voluntarily disclosures now before it becomes too late.
While OVDP is ending, the IRS does not intend to stop its ongoing crackdown on undeclared offshore accounts, and the IRS has made clear it will continue to use a number of different investigative and enforcement means at its disposal. Approximately 1,545 taxpayers have faced criminal charges for undeclared offshore accounts since 2009, so this threat that the IRS could find your account if you don't declare it on your own is a very real one.
Speak With an Experienced OVDP Attorney Today to Protect Your Rights
For some taxpayers, participating in OVDP before it is over will be a smart financial choice. However, this is not the case in every circumstance. Washington DC tax evasion attorney Kevin E. Thorn can help you determine the most favorable course of action based on your unique situation. He will review your best options are if you have undeclared offshore funds. Contact Kevin today for a confidential consultation.