OVDP to Stay Open Indefinitely

1. OVDP To Stay Open Indefinitely

2. Background On OVDP The International Revenue Service (IRS) has provided taxpayers with the ability to voluntarily disclose accounts and income that were not properly reported in the past. This is largely a result of the Foreign Accounts Tax Compliance Act (FATCA) which was passed in 2010 and came into effect just last year. The law requires foreign financial institutions to provide more detailed information about U.S. citizens who hold accounts or assets overseas. Since the law has gone into effect, the IRS has continued to search for undisclosed income and accounts that are hidden overseas and is prepared to levy strict penalties and charges for those who are in non-compliance.

3. Disclosing Unreported Accounts However, the IRS has also issued an invitation to any taxpayer who may not be in compliance with the latest tax laws to disclose their assets or income held overseas through one of multiple voluntary disclosure programs. Recently, the IRS issued a news release confirming the focus on taxpayers with offshore accounts and encouraging individuals to consider applying for the Overseas Voluntary Disclosure Program. This program is specifically designed for taxpayers who are holding undisclosed foreign accounts and wish to now disclose them.

4. Disclosing Unreported Accounts (Cont.) The program requires taxpayers to review the past eight years of tax history and pay overdue taxes in full in addition to a 20% penalty on the full amount owed. There may also be an additional penalty levied based on the total of an individual’s largest offshore account balance up to 50% or the total account value. This program is in addition to the Foreign Streamlined Program, which is only open to those who can certify that their failure to comply was entirely non-willful.

5. The Time Is To Act Now According to the news release, the IRS wants to make it clear that the OVDP will continue to be open to new applicants indefinitely. However, this is not an invitation for taxpayers to procrastinate necessary disclosures. The IRS encourages all taxpayers to bring their financial matters into compliance as soon as possible and is actively investigating individuals who may be guilty of tax avoidance through overseas accounts.

6. Questions If you have questions regarding your tax compliance situation, you should consult a tax attorney or professional tax law firm. The time to act is now while such disclosure programs are still available.

7. ABOUT FREEMAN TAX LAW Freeman Tax Law is a boutique tax law firm with national exposure equipped to handle all domestic and international tax law matters. At Freeman Tax Law, the attorneys and professional staff have vast experience with foreign tax compliance, international tax planning, and resolving tax controversies involving offshore banking matters. Freeman Tax Law helps taxpayers and foreign entities become in compliance with laws such as Foreign Account Tax Compliance Act (FATCA) and Offshore Voluntary Disclosure Program (OVDP). In addition to handling complex tax controversies, the Freeman Tax Law team has extensive expertise in assisting clients with wealth management and estate planning.

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