The Internal Revenue Service (IRS) announced an end to the Offshore Voluntary Disclosure Program (OVDP). The program will end on September 28, 2018, leaving tax payers six months to voluntarily disclose foreign financial assets. Business owners with undisclosed foreign assets should utilize the time to become compliant.
A history of arrears
The program launched in 2009, but underwent several changes in 2011, 2012 and 2014. The IRS stated from the launch that the program would be temporary. Since the initial launch nine years ago the program has collected $11.1 billion dollars stemming from back taxes, interest and penalties. Over 56,000 tax payers used the program to disclose assets and comply with the tax laws. In 2011 alone more than 18,000 tax payers came voluntarily disclosed assets, but the number of people coming forward has been steadily decreasing with only 600 tax payers disclosing assets in 2017.
Remaining options for tax payers
The IRS sill still offer the Streamlined Filing Compliance Procedures program to help taxpayers unaware of their tax filing obligations become compliant. Currently that program has enabled 65,000 eligible tax payers become compliant. These changes reflect current efforts to curtail offshore tax avoidance and educate tax payers about their financial responsibilities.
Tax payers who fail to disclose assets can be charged with a federal felony, leading to significant prison time and fines. Whether the disclosure was willful or accidental, the penalties are steep and accurate filing is a must. For those facing an audit or tax fraud charges, an experienced attorney acting as your advocate is essential.