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New Offshore Voluntary Disclosure Program (OVDP)?

posted Jan 11, 2015, 10:25 PM by Zaher Fallahi

Is this a new offshore voluntary disclosure program?  No. This is a continuation of the program introduced in 2012 with modified terms, but for purposes of referring to this modified program, it may be referred to as the 2014 OVDP.  The IRS’s prior Offshore Voluntary Disclosure Program (2009 OVDP), and Offshore Voluntary Disclosure Initiative (2011 OVDI), and the 2012 OVDP have demonstrated the value of uniform penalty structures for taxpayers who come forward voluntarily and report their previously undisclosed foreign accounts and assets. These initiatives have enabled the IRS to centralize the civil processing of offshore voluntary disclosures and to resolve a very large number of cases without examination. Because the implementation of the Foreign Account Tax Compliance Act (FATCA) and the IRS and Department of Justice offshore enforcement efforts continue to raise the risk of detection of taxpayers with undisclosed foreign accounts and assets for the foreseeable future, it has been determined that 2012 OVDP should be modified and made available to taxpayers who wish to voluntarily disclose their offshore accounts and assets to avoid criminal prosecution and limit their exposure to civil penalties but have not yet done so. Unlike the 2009 OVDP and the 2011 OVDI, the 2014 OVDP has no set deadline for taxpayers to apply. However, the terms of this program could change at any time. For example, the IRS may increase penalties or limit eligibility in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any time.

Zaher Fallahi is a Tax resolution CPA and assists clients with  tax preparation, tax planning, IRS representation, disclosing undeclared foreign bank accounts (offshore voluntary disclosure program, OVDP), report of foreign bank & financial accounts (FBAR, Foreign Account Tax Compliance Act (FATCA), Telephones:  (310) 719-1040 (Los Angeles), ( 714) 546-4272 (Orange County) or e-mail:  taxattorney@zfcpa.com

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