The Internal Revenue Service announced on March 13, 2018 that it will close the 2014 Offshore Voluntary Disclosure Program (OVDP) on September 28, 2018.  The OVDP currently provides for Taxpayers with undisclosed financial assets to voluntarily report these and pay
the related taxes of the 8 years for which the due dates have already passed, following a set
of guidelines.

The result of the OVDP is an agreement with the IRS by which the taxpayer pays the tax, interest, 20% accuracy related penalty and a miscellaneous offshore penalty of 27.5% or 50% of the highest aggregate undisclosed amount for any of the 8-year OVDP period.  Such an agreement will put the taxpayer in compliance and can result in substantial tax savings and benefits, considering the potentially stiffer penalties under normal procedures plus the risk of facing criminal charges.

The IRS will continue to offer the Streamlined Filing Compliance Procedures (SFCP) by which eligible taxpayers, who might not have been aware of their filing obligations, may come into compliance with a reduced miscellaneous offshore penalty of 5%.  However, this program is also expected to end at some point.  Other programs that the IRS will continue to offer beyond the September-28 deadline are the following:

• IRS Criminal Investigation Voluntary Disclosure Program;
• Delinquent FBAR Submission Procedures; and
• Delinquent International Information Return Submission Procedures.

The IRS will also continue to use other tools to combat offshore tax avoidance, including but not limited to Whistleblower leads, civil examination and criminal prosecution. 

Our Lawyers are knowledgeable and experienced in the above mentioned procedures.  We can help you determine which option will result in the most favorable treatment to be in compliance with federal tax laws and avoid expensive litigation. 

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Any opinion expressed considers solely tax aspects presented herein.  Nevertheless, there are additional factors to be considered for each particular situation.