VIEWpoint Issue 2 | 2022
Inflation Reduction Act: Highlights of Key Changes for You and Yo...
2022-2023 Tax Planning Guide
The Internal Revenue Service (IRS) issued a news release announcing it will close down the 2014 Offshore Voluntary Disclosure Program (OVDP) on Sept. 28, 2018. By alerting taxpayers now, the IRS intends that any U.S. taxpayers with undisclosed foreign financial assets have time to use the OVDP before the program closes.
“Taxpayers have had several years to come into compliance with U.S. tax laws under this program,” said Acting IRS Commissioner David Kautter. “All along, we have been clear that we would close the program at the appropriate time, and we have reached that point. Those who still wish to come forward have time to do so.”
The IRS notes that the end of the current program is a result of increased third-party reporting and awareness of U.S. taxpayers of their offshore reporting obligations.
“The IRS remains actively engaged in ferreting out the identities of those with undisclosed foreign accounts with the use of information resources and increased data analytics,” said Don Fort, Chief, IRS Criminal Investigation. “Stopping offshore tax noncompliance remains a top priority of the IRS.”
The Streamlined Filing Compliance Procedures will remain in place and available to eligible taxpayers. As with OVDP, the IRS has said it may end the Streamlined Filing Compliance Procedures at some point.
The implementation of the Foreign Account Tax Compliance Act (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 undisclosed foreign financial assets. 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:
The Streamlined program is still available. However, the IRS’ stance regarding taxpayers having a heightened awareness of offshore reporting obligations may make it more difficult to convince the IRS that there was no willful conduct involved in not filing past tax returns or disclosures. It should also be noted that the Streamlined program does not provide the level of assurance the OVDP program does regarding criminal prosecution or final penalties.
If you need help with your offshore reporting obligations, contact our international tax advisors at Moore Stephens Doeren Mayhew.
This article is a reprint from Moore Stephens Doeren Mayhew’s GlobalVIEW.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
A quick registration is required to view our resources.
You will only be asked to do this one time (unless you don't save your browser cookies).