If you entered the 2012 IRS Voluntary Offshore Disclosure Program and are representing yourself, you may need
proffessional advice as the process proceeds or wish to have an Attorney/CPA represent you before the agent appointed
to handle your disclosure. We have assisted or advised more than 100 taxpayers in connection with the IRS Voluntary
Offshore Disclosure Programs. We know how to secure you the best possible outcome from the IRS. Request a mini consultation to discuss your individual situation, plan your strategy and answer your questions.
The IRS currently has in effect a
Voluntary Offshore Disclosure Program for Americans living in the US and living abroad who have failed to report their offshore
assets, bank accounts, income, etc. on their US tax returns. It provides for possible reduced penalties and if you qualify
an assurance that you will not be criminally prosecuted.
decision to open a second special disclosure initiative follows continuing interest from taxpayers with foreign accounts.
The first special voluntary disclosure program closed with 15,000 voluntary disclosures on Oct. 15, 2009. Since that time,
more than 3,000 taxpayers have come forward to the IRS with bank accounts from around the world. These taxpayers will also
be eligible to take advantage of the special provisions of the new initiative.
“As I’ve said all along, the goal is to get people back into the U.S.
tax system,” Shulman said. “Combating international tax evasion is a top priority for the IRS. We have additional
cases and banks under review. The situation will just get worse in the months ahead for those hiding assets and income offshore.
This new disclosure initiative is the last, best chance for people to get back into the system.”
The new initiative announced today –
called the 2012 Offshore Voluntary Disclosure Initiative (OVDI) -- includes several changes from the 2009 Offshore Voluntary
Disclosure Program (OVDP). The overall penalty structure for 2012 is higher, meaning that people who did not come in through
the 2009 and 2011 voluntary disclosure program will not be rewarded for waiting. However, the 2012 initiative
does add new feature2
2012 initiative, there is a new penalty framework that requires individuals to pay a penalty of 27.5 percent of the amount
in the foreign bank accounts in the year with the highest aggregate account balance covering the 2004to 2011 time period.
Some taxpayers will be eligible for 5 or 12.5 percent penalties. Participants also must pay back-taxes and interest for up
to eight years as well as paying accuracy-related and/or delinquency penalties.
Taxpayers participating in the new initiative must file all original and amended
tax returns and include payment for taxes, interest and accuracy-related penalties by the Aug. 31 deadline.
The IRS is also making other modifications to the
2011 disclosure initiative.
face a 25 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty.
The IRS also created a new penalty category of
12.5 percent for treating smaller offshore accounts. People whose offshore accounts or assets did not surpass $75,000 in any
calendar year covered by the 2011 initiative will qualify for this lower rate.
The 2011 initiative offers clear benefits to encourage taxpayers to come in now
rather than risk IRS detection. Taxpayers hiding assets offshore who do not come forward will face far higher penalty scenarios
as well as the possibility of criminal prosecution.
“This is a fair offer for people with offshore accounts who want to get right with the nation’s taxpayers,”
Shulman said. “This initiative offers them the chance to get certainty about how their case will be handled. Just as
importantly, those who truly come in voluntarily can avoid criminal prosecution as well.”
The IRS is handling processing of the voluntary
disclosures in centralized units to more efficiently process the applications.
The IRS has launched a new section on www.IRS.gov that includes the full terms and conditions on the 2011 Offshore Voluntary
Disclosure Initiative, including an extensive set of questions and answers to help taxpayers and tax professionals. The web
site also includes details on how people can make a voluntary disclosure.
In the first voluntary disclosure program in 2009, taxpayers faced up to a 20 percent
penalty covering up to a six-year period. Taxpayers came forward with about 15,000 voluntary disclosures in that effort covering
banks in more than 60 countries.
said IRS efforts in the international arena will only increase as time goes on.
“Tax secrecy continues to erode,” Shulman said. “We
are not letting up on international tax issues, and more is in the works. For those hiding cash or assets offshore, the time
to come in is now. The risk of being caught will only increase.”
We offer our clients the confidentiality of "Attorney-Client Privilege" if
you wish to discuss the consequences of entering this program and your personal strategies. We counseled numerous
clients concerning the First Offshore Disclosure Program and represent clients in that program. Please contact us if
you need our help. The procedures for entering the Program or securing a 90 day extension of time to enter the Program
are complex. Read FAQs 23-25.1 for the exact steps required or call us so we can guide you through this process.
More about the 2012 Offshore Voluntary Disclosure Initiative
2012 Offshore Disclosure Frequently Asked Questions
Read the latest news on the 2012 Voluntary Disclosure Program