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Tag Archive for Offshore Voluntary Disclosure Program

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

Nina Olson, Taxpayer Advocate, Tax Blog, Washington D.C., USA, TaxConnections

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)

Nina Olson, Tax Advocate, Tax Blog, Washington D.C., USA, TaxConnections

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

Kevin Johnson, Tax Advisor, Philadelphia, Pennsylvania, USA, Tax Blog, TaxConnections
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)

Nina Olson, National Taxpayer Advocate, Tax Blog, Washington D.C., USA, TaxConnections

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

IRS Amnesty; The Offshore Voluntary Disclosure Program Explained In Less Than 5 Minutes

Richard Lehman, Tax Advisor, Boca Raton, FL, TaxConnections

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IRS Amnesty; The Offshore Voluntary Disclosure Program Explained In Less Than 5 Minutes

Richard Lehman, Tax Connections

American citizens and residents often have placed funds in “foreign bank accounts” in banks all over the world. There is a requirement that all of these foreign bank accounts be reported to the United States on an annual basis and that United States income taxes be paid on all of these bank deposit funds.

Many American taxpayers who have been unaware of this requirement are now being pursued for taxes and penalties for not reporting their foreign bank deposits. There are two Internal Revenue procedures that will permit American taxpayers, who have not properly reported their foreign bank deposits, and the income therefrom, to come forward and report their foreign bank deposits. This avoids significant fines and penalties on a United State taxpayer who has not reported foreign bank deposits. Read more

Offshore Tax Suit Switch From OVDP Doesn’t Block Collection

Ron Marini

Three taxpayers seeking to switch over to the IRS’ new “streamlined” compliance program for unreported offshore income argued to a D.C. Circuit panel Tuesday that their lawsuit is not foreclosed by the Anti-Injunction Act’s bar on pre-enforcement tax challenges, attacking the government’s key defense in the case. The case is Maze et al. v. Internal Revenue Service et al., case number 16-5265, in the U.S. Court of Appeals for the District of Columbia Circuit.

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The OVDP Program May End After 2017

Ron Marini

U.S. taxpayers who have foreign bank and/or financial accounts should be watching the clock. The window to voluntarily report foreign accounts in order to mitigate IRS penalties may be ending after 2017.

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IRS Nets $10 Billion From More Than 100,000 Taxpayers In The OVDP Programs

Ron Marini

The IRS, in news release IR 2016-137, highlighted the accomplishments of its Offshore Voluntary Disclosure Program (OVDP) and encouraged taxpayers with undisclosed offshore accounts to come into compliance with the federal tax obligations. The OVDP and streamlined compliance programs have been used to bring over 100,000 taxpayers into compliance and have brought in over $10 billion in taxes, interest, and penalties.

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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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