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Archive for OVDP

No More Hide N’ Seek For Taxpayers’ Overseas Assets

IRS Is Ending Its Offshore Voluntary Disclosure Program

The IRS is ending the Offshore Voluntary Disclosure Program (OVDP) this September 28th. This program has given U.S. taxpayers an opportunity to come forward with ‘previously undisclosed foreign income, accounts or assets with the promise and certainty that they will not face criminal prosecution.

Since the program’s inception in 2009, over 56,000 US taxpayers have paid over $11.1 billion in back taxes, interest, and penalties through the OVDP, but the number of participants has steadily declined over the past few years – from 18,000 in 2011 down to only 600 in 2017.

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IRS Reminds Those With Foreign Assets About U.S. Tax Obligations

WASHINGTON — The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account to remember the upcoming deadline that applies to reports for these accounts, often referred to as FBARs.

Here is a rundown of key points to keep in mind:

Deadline For Reporting Foreign Accounts Read more

A Discussion Of Belated Alternatives To The Offshore Voluntary Disclosure Program And Recommendations For Further Improvements (Part 3 of 3)

In the first blog in this series we discussed how those who participate in amnesties also tend to be people who made inadvertent errors, that is, “benign” actors, rather than bad actors. We discussed how it can make sense to offer some form of amnesty before implementing a sudden increase in penalties or enforcement. Otherwise, the increase is more likely to be viewed as unfair and erode trust for the government. Moreover, a decline in trust can erode voluntary compliance.

In the second blog, we cited data showing that, consistent with the research on amnesties, IRS’s first amnesty alternative – the Offshore Voluntary Compliance Initiative (OVCI) – generally attracted people who failed to report offshore accounts but had paid their taxes or had under-reported small amounts. Read more

An Analysis Of Tax Settlement Programs As Amnesties – Why IRS’s Offshore Voluntary Disclosure Settlement Programs Posed Risks To Voluntary Compliance (Part 2 of 3)

In last week’s blog, we discussed how broad amnesties can blunt economic deterrence, but narrow amnesties or amnesty alternatives (e.g., amnesties that forgive only penalties before noncompliance is detected) do not necessarily have the same negative effects. We also cited research suggesting that those who participate in amnesties also tend to be people who made inadvertent errors (i.e., “benign” actors, rather than bad actors). Furthermore, without an amnesty, a sudden increase in penalties or enforcement is more likely to be viewed as unfair and erode trust for the government – a view that can erode voluntary compliance. Read more

The Party Is Ending For The IRS Offshore Voluntary Disclosure Program

On March 13, 2018. the Internal Revenue Service announced that it is ending the Offshore Voluntary Disclosure Program on September 28, 2018. The IRS has made the announcement to allow time for taxpayers who have undisclosed foreign financial accounts and assets to enter into the program and make a OVDP voluntary disclosure before the program ends.
OVDP Program

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Analysis Of Tax Settlement Programs As Amnesties (Part 1 of 3)

On March 13, 2018, the IRS announced that on September 28, 2018, it would end the offshore voluntary disclosure program (OVDP), as it had only attracted 600 applicants in 2017. So now is a good time to take a step back to review the program in the broader context of the research on tax amnesties.

Settlement programs and other voluntary disclosure or correction programs generally offer some form of amnesty. Offering broad tax amnesties on a regular basis, as many states do, can erode voluntary compliance. Read more

Options Available For U.S. Taxpayers With Undisclosed Foreign Financial Assets

The implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments.  Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:

  1. Offshore Voluntary Disclosure Program;
    Note: The Offshore Voluntary Disclosure Program (OVDP) is closing. Refer to the OVDP FAQs for an outline of the sunset provisions.
  2. Streamlined Filing Compliance Procedures;
  3. Delinquent FBAR submission procedures; and
  4. Delinquent international information return submission procedures.

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Enrollment In IRS Disclosure Programs Surpasses 100,000 Mark

Ephraim Moss

The IRS announced that over 100,000 taxpayers have now participated in its disclosure programs, which have been available to delinquent filers since 2009. More specifically, according to the IRS, 55,800 taxpayers have used the Offshore Voluntary Disclosure Program (OVDP) to resolve their tax obligations, paying more than $9.9 billion in taxes, interest and penalties, while an additional 48,000 taxpayers have used the Streamlined Procedures, paying approximately $450 million.

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Ex-Swiss Banker Heads To Trial For Conspiracy To Evade Taxes

Ron Marini

We posted 144 Offshore Banks & Now Financial Advisors Are Turning Over Your Names To The IRS where we discussed the Government has added 47 more banks and financial advisors to this list bringing the number to 144 total banks and foreign financial advisors. Included in this list as #137 is Stefan Buck (effective 11/15/16).

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Exposé On The Cost For An Accidental American Under FATCA

William Byrnes

An interesting read by the Telegraph that walks an Accidental American through the process of renunciation of American citizenship to avoid paying a life time of US taxes, penalties, interest, and potentially criminal offences for non-filing. Read it here. Excerpts below:

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144 Offshore Banks & Now Financial Advisors Are Turning Over Your Names To The IRS – What Are Your Waiting For?

Ron Marini

On May 26, 2016 we posted 97 Offshore Banks Are Turning Over Your Names To The IRS – What Are Your Waiting For? and since then, the Government has added 47 more banks and financial advisors to this list bringing the number to 144 offshore banks and foreign financial advisors. The IRS keeps updating its list of foreign banks which are turning over the names of their U.S. Account Holders, who are now subject to a 50% (rather than 27.5%) penalty in the IRS’s Offshore Voluntary Disclosure Program (OVDP). This penalty is based on the highest account balance measured over up to eight years.

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Is This Canadian Baby An American Tax Cheat?

Is This Canadian Baby An American Tax Cheat?

A Canadian baby is learning about taxes, banking and activism at a tender age. The eight month old girl received a “Dear Valued Customer” letter from her Canadian bank when she was six months old advising her that her account information may be provided to Canada Revenue Agency to pass on to IRS.  The wee “Valued Customer” was directed to complete, sign and mail forms to the bank.

Baby Elle (not her real name) and her Canadian parents were Read more

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