The Offshore Voluntary Disclosure Program (OVDP) is part of an Internal Revenue Service increasing effort to stop offshore tax evasion and guarantee tax compliance. U.S. taxpayers who have undisclosed offshore accounts or assets and qualify to certain IRS OVDP requirements are eligible to apply for IRS Criminal Investigation’s 2012 OVDP and penalty system. Individual U.S. taxpayers, as well as entities (such as corporations, partnerships, and trusts), are eligible to make a voluntary disclosure, assuming all other eligibility requirements are met.
The Internal Revenue Service has aggressively increased its enforcement, criminal prosecution, and implementation reporting through the Foreign Account Tax Compliance Act. The Internal Revenue Service also eliminated all loopholes that have been used by some taxpayers with offshore accounts. If a taxpayer challenges in a foreign court the disclosure of tax information by that government, the taxpayer is required to notify the U.S. Justice Department of the Appeal and would most likely need professional representation. The 2012 OVDP has exceeded the collected $5 billion mark last January 2012 and has even tightened the eligibility requirement. Having a professional OVDP tax attorney presentation is highly recommended for a successful settlement.
With new tax treaties being developed at an increasing rate, more countries will be cooperating with the US to go after tax-evading U.S. citizens. The Internal Revenue Service also put taxpayers on notice that their eligibility for OVDP could be terminated once the IRS has taken legal action that increases the risk of criminal prosecution if not addressed timely.
Do you have an offshore or a foreign bank account and owe $10,000 or more in back taxes? You have options such as the IRS Streamline Filing Compliance Procedure. Direct Tax Relief is a tax debt relief company and can guide your offshore tax situation. Contact us today for a free consultation.
UPDATE FOR HISTORICAL PURPOSES:
The IRS closed the Offshore Voluntary Disclosure Program in early 2018. Since the program started over 56,000 taxpayers utilized the program to voluntarily comply and pay over $11 billion back taxes, interest, and penalties.
Sources:
- Offshore Voluntary Disclosure Program: https://www.irs.gov/newsroom/irs-to-end-offshore-voluntary-disclosure-program-taxpayers-with-undisclosed-foreign-assets-urged-to-come-forward-now
- Streamlined Filing Compliance https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures
