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Tag 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

Tom Kerester, Tax Blog, Tax Ambassador, Washington D.C., USA, TaxConnections

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)

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

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

IRS, FATCA, OVDP, FBAR, Department Of Justice, U.S. Tax, Undisclosed Foreign Financial Assets, Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

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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The OMG Moment And Dealing With U.S. Citizenship Problems

As I write this post, my mind goes back to one of my very first posts about U.S. compliance issues. This post was called “What you should consider before contacting a lawyer.” Since that time I have written hundreds of post describing the problems faced by Americans abroad.

More recently

In this first post of this series, I explained the importance of the Canada U.S. tax treaty and how it provides “some protection” to Canadian citizens from U.S. tax debts.

In the second post, I explained some of the characteristics of the OVDP program and how Mr. Dewees got caught in it.

In this post, I am suggesting some possible lessons that can be learned from the story of Donald Dewees. Read more

Americans Abroad And IRS ‘Amnesty’ Offers In OVDP

In an earlier post, I explained why the Canada Revenue Agency assisted the IRS in collecting a penalty on a Canadian resident. The bottom line was that he was presumably NOT a Canadian citizen and therefore did NOT have the benefits of the tax treaty. This post is to explain where the penalty came from in the first place.

It has been widely reported that a U.S. citizen residing in Toronto, Canada since 1971, paid a $133,000 U.S. dollar penalty for failing to file IRS forms disclosing that he was running a business through a Canadian corporation. How did this fly get caught in the spider’s web? Read more

The Canada-U.S. Tax Treaty Does Not Protect From Tax Liability

Dewees 1: The Canada-U.S. tax treaty does NOT protect Canadians from U.S. tax liability but does mean that Canada will NOT assist the U.S. in collection!

There are certainly benefits to being a Canadian citizens. Perhaps Canadian citizenship is the most important line of defense against the confiscation that is OVDP. Read more

Court Blocks Attempt To Transfer From OVDP To Streamlined

Ephraim Moss

In a very recent decision (Maze v. IRS), the D.C. Circuit Court of Appeals upheld a lower court decision blocking several taxpayers’ efforts to leave the OVDP tax amnesty program and enter the friendlier IRS Streamlined program without utilizing the required transition rules.

The Maze case demonstrates the importance of choosing the IRS tax amnesty program that is right for you from the outset. Read more

The IRS Tax Amnesty Programs – Fact Or Fiction

Despite the overall success of the IRS tax amnesty programs in recent years, many expats remain hesitant to enter the programs due to a number of misunderstandings surrounding their requirements and their outcomes. In this blog, we separate fact from fiction so that you can decide intelligently whether tax amnesty is right for you. Read more

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