Tag Archives: OVDP

FBAR Penalties Now Adjusted for Inflation: Abatement/Mitigation Still Possible

If you haven’t filed your Report of Foreign Bank and Financial Accounts (FBARs) on a timely basis, you could be at risk of a higher civil penalty assessment. Inflation-adjusted FBAR penalties are now in effect. New FBAR Civil Penalties Framework The statutory civil penalties most people are familiar with, and as reflected ...

2017 OVDP Declines and Withdrawals Campaign: Certain U.S. Taxpayers at Risk of Audit

In 2016, the Treasury Inspector General for Tax Administration (TIGTA) released a report which assessed how well that IRS was managing the Offshore Voluntary Disclosure Program (OVDP). OVDP is one of the programs taxpayers may use to become compliant if they previously had failed to report offshore income on their ...

IRS Clarification on Non-Willful Conduct Certification for Streamlined Offshore Compliance Procedures: Revisions to IRS Forms 14654 and 14653

Many U.S taxpayers are often surprised to discover that they have a U.S. tax reporting obligation on financial accounts or assets held overseas. Once they discover their obligation, there are a number of programs through which they can become compliant with their U.S. tax reporting obligation. One option, if the taxpayers meet the requirements, is to submit either IRS Form 14654 or IRS Form 14653 for the Streamlined Domestic Offshore Procedures or the Streamlined Foreign Offshore Procedures, respectively. These forms require U.S. taxpayers to certify that their prior non-compliant conduct was non-willful. However, not much guidance exists regarding what information is needed as part of this certification. A recent change by the IRS to these forms has provided some clarity.

One Size Does Not Fit All: Unintended Consequences of the Offshore Voluntary Disclosure Program

On January 9, 2012, the Internal Revenue Service (IRS) reopened the Offshore Voluntary Disclosure Program (“2012 OVDP”) “on the heels of strong interest in the 2011 and 2009 programs.”  Although the IRS maintains that it may “end the 2012 program at any time in the future,” there is no indication that it will abandon its well-established pattern of announcing new iterations of the OVDP with slight changes to form and slightly more significant changes to substance. The steadily increasing rate of the miscellaneous penalty—currently 27.5 percent of the highest aggregate value of foreign accounts and/or assets that are connected in any way to the taxpayer’s noncompliance, a significant increase from the 20-percent miscellaneous penalty in the 2009 Offshore Voluntary Disclosure Program (“2009 OVDP”)—suggests that the IRS is seeking to deter noncompliant taxpayers from taking a “wait and see” approach.