The IRS announced in News Release 2018-52 that it will ramp down its 2014 Offshore Voluntary Disclosure Program and close the program on Sept. 28, 2018. OVDP was initially launched in 2009 and was followed by modifications in 2011 and 2014. By alerting taxpayers, the IRS intends to provide U.S. taxpayers with undisclosed foreign financial assets time to use the OVDP before it closes.
Taxpayers holding undisclosed foreign accounts and assets, including those held through undisclosed foreign entities, should consider making a voluntary disclosure because it enables them, through a structured program, to:
- Avoid substantial civil penalties;
- Generally eliminate the risk of criminal prosecution for issues relating to non-compliance and failure to file FBARs; and,
- Become compliant with the IRS.
Because the circumstances of taxpayers with foreign financial assets vary widely, the IRS will continue offering the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those assets:
- IRS-Criminal Investigation Voluntary Disclosure Program;
- Streamlined Filing Compliance Procedures (not available for wilful failures);
- Delinquent FBAR submission procedures; and
- Delinquent international information return submission procedures.
If you have any question regarding this Client Alert or would like to further discuss issues addressed herein, please feel free to contact Ronald P. Cima (212-574-1471), Jonathan P. Brose (212-574-1615), James C. Cofer (212-574-1688), Peter E. Pront (212-574-1221), Daniel C. Murphy (212-574-1210) or Brett R. Cotler (212-574-1269).
