Streamlined OVDP Amnesty is Very LimitedOffshore Account Update
Posted in on August 19, 2014
The Offshore Voluntary Disclosure Program (OVDP) limits the penalties faced by taxpayers who failed to file the Report of Foreign Bank and Financial Accounts (FBAR). FBAR must be filed every year by any U.S. citizen who has offshore accounts, even if the citizen is living abroad in the country where the account is held. There is a streamlined OVDP procedure, but unfortunately early indicators suggest that very few people will be found to be eligible.
The Internal Revenue Service has specific and detailed instructions for complying with the requirements of the streamlined procedure to secure amnesty under OVDP. As the IRS makes clear failure to comply with any of the specific IRS requirements “will result in returns being processed in the normal course without the benefit of the favorable terms of these procedures.”
Applying for OVDP and then failing to become eligible for the amnesty program can have extremely serious consequences including the risk of criminal prosecution as well as penalties and fees that may exceed the value of the offshore account. You should speak with a New Jersey IRS amnesty attorney for help to ensure that you have the best chance of getting the amnesty you expect.
Streamlined OVDP Amnesty is Limited
There are four offshore programs that have resulted in more than 39,000 disclosures by taxpayers according to the Government Accountability Office. Unfortunately, the GAO report revealed that people with the smallest accountants were paying a disproportionate penalty. These individuals were paying at least 575 percent of taxes, interest and penalties on unreported income from offshore accounts. Initially, the IRS was also moving more slowly to process applications for amnesty from benign actors as compared with bad actors who intentionally violated the rules.
Despite problems, some people have successfully participated in OVDP, benefitting form the reduced risk of belatedly reporting their accounts rather than waiting for the IRS to identify them. The IRS has collected more than $5.5 billion in revenues from voluntary reporting and taxpayers were able to avoid penalties that could sometimes total more than the total value of the offshore accounts.
To avoid problems, it is imperative to follow the IRS instructions exactly, especially if you are seeking to participate in the streamlined OVDP program.
A New Jersey IRS amnesty attorney can assist you in completing the paperwork. Your lawyer can also help with determining if you qualify for the Streamlined Foreign Offshore Procedures, which are available to people who meet non-residency requirements and who failed to file FBARs but did not engage in willful tax evasion. Non-residency requirements include spending at least 330 days in the year out of the U.S. as well as not having a U.S. residence. Call or contact an IRS tax attorney today at Thorn Law Group for more information and for assistance with your tax issues.