New Post-OVDP IRS Voluntary Disclosure Procedures Announced

- By : P. Patel

The Internal Revenue Service released new updated procedures for voluntary disclosures since the old Offshore Voluntary Disclosure Program (OVDP) closed on September 28, 2018. Last week, IRS deputy commissioner Kirsten Wielobob issued Interim Guidance Memo LB&I-09-1118-014, Updated Voluntary Disclosure Practice (PDF) on November 20, 2018 to supplement procedures regarding the voluntary disclosure practice. The updated procedures apply

Denied access to or withdrew from the IRS Offshore Voluntary Disclosure Program (OVDP)?

- By : P. Patel

This year taxpayers who either were denied access to or withdrew from the IRS Offshore Voluntary Disclosure Program (OVDP) have been receiving Letter 5935 (HERE) from the IRS notifying them that they need to come into compliance with U.S. reporting requirements relating to foreign income, foreign entities, and/or foreign financial accounts. The letter is part of

Run to the Door: IRS Terminates Offshore Voluntary Disclosure Program (OVDP) effective September 28, 2018

- By : P. Patel

IRS Issue Number:    IR-2018-52 IRS to end offshore voluntary disclosure program; Taxpayers with undisclosed foreign assets urged to come forward now WASHINGTON – The Internal Revenue Service today announced it will begin to ramp down the 2014 Offshore Voluntary Disclosure Program (OVDP) and close the program on Sept. 28, 2018. By alerting taxpayers now, the IRS intends

U.S. Taxpayers at New Risk of Audit from OVDP Declines and Withdrawals Campaign

- By : P. Patel

Last year, the US 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 tax returns and file

IRS Announces new OVDP Declines-Withdrawals Campaign

- By : P. Patel

Earlier this month, the IRS’ Large Business and International division released its list of 13 focus areas for issue- based examinations and concerns for compliance.   One of those areas involves the IRS Offshore Voluntary Disclosure Program.  Entitled, “OVDP Declines-Withdrawals Campaign,” this area of focus involves taxpayers who have applied for the offshore voluntary disclosure

Cost of Compliance Rises under OVDP

- By : P. Patel

The cost of compliance for many people is growing.  Those U.S. persons with bank accounts in foreign jurisdictions who have yet to come into compliance with U.S. tax filing requirements have very little time.  In addition to the increased amount of data being sent to the U.S., last week the US government announced that it

Article Discusses Termination of Offshore Voluntary Disclosure Program (OVDP) and the Streamlined Filing Compliance Procedures (SFCP)

- By : P. Patel

The Internal Revenue Service (IRS) currently offers non-compliant US taxpayers several different relief programs in which to report foreign assets and/or income and become compliant with US rules related to the disclosure of foreign assets. One option is the Offshore Voluntary Disclosure Program (OVDP). Another is the Streamlined Filing Compliance Procedures (SFCP). SFCP is further

File a Protective Claim for Refund for Possible OVDP Opt Out Cases

- By : P. Patel

In 2009, the IRS had introduced an Offshore Voluntary Disclosure Initiative/Program (OVDI/OVDP). In following years, the program was reintroduced and revised. When it comes to addressing offshore filing deficiencies, several issues exist in connection with the statute of limitations, the nature of the error/omission, and the taxpayer’s intent. Many clients have been receiving conflicting advice

OVDP New Forms Announced by IRS

- By : P. Patel

The IRS has simplified the process of entering the OVDP Program by issuing the following forms: Form 14457 – Offshore Voluntary Disclosure Letter Form 14454 – Offshore Voluntary Disclosure Program Letter Attachment The new forms (the old forms were simple Word documents) will likely standardize the IRS’ review process for OVDP eligibility, guide the IRS examiner in

What Is The Difference Between the SDOP and the Current OVDP program?: Willfulness

- By : P. Patel

What Is The Difference Between the SDOP and the Current OVDP program? The Streamlined Offshore Procedures (SDOP and SFOP) liberalizes the old restrictions and rewards taxpayers that disclose their offshore assets with a lower penalty and a very low tax. Taxpayers will only have to file 3 years of amended income tax returns instead of

New offshore voluntary disclosure program (OVDP) changes expected to be favorable to taxpayers

- By : P. Patel

During Internal Revenue Service (IRS) Commissioner John Koskinen’s remarks at a speech before the United States Council-OECD International Tax Conference in Washington last week, he indicated that the agency is preparing a new offshore voluntary disclosure program (OVDP) that will be easier on “law-abiding” American residents abroad. Koskinen disclosed that, “while the 2012 OVDP and

Offshore Voluntary Disclosure Initiative/Program (OVDI/OVDP) opt-out results and updates

- By : P. Patel

Many of our clients are carefully considering OVDI opt-outs. The opt out option became first available during the 2011 OVDI program, and continues with the current OVDP program. The 2012 OVDP program continues the procedures announced in 2011 regarding decisions to “opt out” of the voluntary disclosure penalty structure. In such a case, IRS agents are instructed to neither

New Taxpayer Advocate Service Report Discusses Optouts out of the OVDI/OVDP

- By : P. Patel

The Taxpayer Advocate Service (TAS) has issued a new mid-year 2013 report.  The TAS report discussion regarding optouts out of the OVDI/OVDP is interesting. For the 2009 OVDP (which was a smaller group of applications compared to 2011 OVDI), there were 290 optouts (vs. 10,735 cases closed after certification, or about 3% opted out) taking

National Taxpayer Advocate Identifies OVDP Program as a Serious Problem

- By : P. Patel

On January 17 that National Taxpayer Advocate Nina Olson recently issued her 2012 Annual Report to Congress calling on Congress to simplify the Tax Code. In her report, Olson questioned the “one-size-fits-all” approach of the IRS Offshore Voluntary Disclosure Program (OVDP), and identified the OVDP program as a most serious problem requiring resolution. The Report

Top 10 factors to consider before deciding to opt out of OVDI or OVDP

- By : P. Patel

While opting out of the OVDI or OVDP amnesty programs may result in a reduction of penalties that may otherwise be assessed, the taxpayer needs to carefully weigh the numerous consequences before doing so. Responsible tax professionals should discuss the consequences of opting out with the client before making such a recommendation. Opting out of

New EZPASS OVDP Without Any Penalties for Non-Resident U.S. Taxpayers

- By : P. Patel

Yesterday, as expected, the IRS announced its new New Filing Compliance Procedures for Non-Resident U.S. Taxpayers that taxpayers presenting “low compliance risk” should file delinquent tax returns, including delinquent information returns, for the past three years; and delinquent FBARs for the past six years.  This seems to be a new EZPASS or express OVDP without any penalties.

Full Analysis of Updated 2012 OVDP Program

- By : P. Patel

The Internal Revenue Service announced on June 26, 2012 (IR-2012-64) that it is tightening eligibility requirements for the open-ended offshore voluntary disclosure program (2012 OVDP) that it announced in January 2012 for taxpayers with unreported income or assets, generally in the form of off-shore bank accounts. The IRS also added details to the compliance initiative

OVDP Ineligibility Possibility Increases

- By : P. Patel

Yesterday the IRS stated that taxpayers’ eligibility to participate in the OVDP could be terminated if the foreign institution where you have your account faces IRS action. Once the U.S. government has taken action against a financial institution, any U.S. taxpayers with accounts at that institution cannot participate in the OVDP. Previously, the IRS’ stated

IRS Form 8938 and the Offshore Voluntary Disclosure Program (OVDP)

- By : P. Patel

The announcement by the IRS of the opening of the new Offshore Voluntary Disclosure Program (OVDP) on January 9, 2012 came as a surprise to most tax practitioners, especially since the 2011 OVDI just ended on September 9, 2011. However, if one analyzes the number of new developments in international tax compliance over the past

Analysis of the new 2012 Offshore Voluntary Disclosure Program (OVDP)

- By : P. Patel

Yesterday the Internal Revenue Service opened its Offshore Voluntary Disclosure Program (OVDP) to encourage more taxpayers with assets in undeclared foreign bank accounts to come forward.  While the OVDP was not expected by most tax lawyers and professionals, it may be welcomed by many of our clients who missed the recently closed 2011 OVDI program.

IRS Announces New 2012 Offshore Voluntary Disclosure Program (OVDP)

- By : P. Patel

The Internal Revenue Service today reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes. The IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as

IRS Has New Procedures for Scrutinizing Quiet Disclosures

- By : P. Patel

A Quiet Disclosure occurs when a person intentionally files tax returns (either amended or original returns, FBARs, and/or other International Informational Returns) outside of one of the IRS’ formal voluntary disclosure In other words, the individual submits the returns and hopes to fly below the radar so that the IRS does not discover that the

Significant FBAR Penalties Upheld by Court

- By : P. Patel

Taxpayers have lost and the US Internal Revenue Service has scored a victory over the taxpayer in Kimble v USA, a court case concerning the reporting of foreign bank accounts. The taxpayer, Alice Kimble, held Swiss accounts at both HSBC and UBS in the early 2000s and was not aware until 2008 that she was required to report

Analysis: IRS New Disclosure Program

- By : P. Patel

On November 29, 2018, the IRS released a memorandum that addressed the process for all voluntary disclosures following the end of the Offshore Voluntary Disclosure Program (“OVDP”) on September 28, 2018. The new voluntary disclosure procedure provides uniformity to offshore and domestic voluntary disclosures. The OVDP was initiated in 2009 and was designed to bring

New IRS Voluntary Disclosure in 7 Steps

- By : P. Patel

The following are the seven steps of the new updated IRS voluntary disclosure process: A taxpayer will make a voluntary disclosure preclearance request using IRS Form 14457 to IRS Criminal Investigation (CI). Taxpayers can request preclearance via mail or fax. No need to fear IRS Criminal Investigation (CI)’s involvement since they have always been involved

Federal District Court Holds that FBAR Penalties in Excess of $100,000 is Unlawful

- By : P. Patel

Recently, the U.S. District Court for the Western District of Texas in U.S. v. Colliot, determined that an individual who repeatedly failed to timely file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, commonly referred to as an FBAR, could not be penalized in excess of the $100,000 regulatory maximum even though the relevant

2018 ABA COMMENTS ON THE OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : P. Patel

We are members of the American Bar Association Section of Taxation, which on May 2, 2018 submitted comments to the IRS on the IRS Offshore Voluntary Disclosure Program (“OVDP”), the Streamlined Domestic Offshore Program (“SDOP”), and the Streamlined Foreign Offshore Program (“SFOP”). We co-authored the ABA comments. The comments are very constructive. It is hoped that the

New FBAR Court Case Makes it Easier for Taxpayers to be Deemed Willful

- By : P. Patel

There is a debate as to the “burden of proof” that must be met by the Internal Revenue Service (IRS) in asserting that an FBAR violation was “willful”.  This is significant because those who willfully fail to file the required FBAR on a timely basis, can be assessed a penalty of up to the greater

IRS reminds those with foreign assets about U.S. tax obligations

- By : P. Patel

The IRS again reminded taxpayers yesterday about their reporting obligations for foreign assets and income. The reminder again represents the IRS’ targeted enforcement of tax laws for reporting obligations for foreign assets and income. Taxpayers should take notice and become compliant. The official IRS notice is below. IR-2018-87, April 9, 2018 WASHINGTON — The Internal Revenue Service

IRS Passport Revocation or Denial for Unpaid Taxes

- By : P. Patel

Two years ago, Congress passed Internal Revenue Code Section 7345. This law allows the Internal Revenue Service (IRS) to work with the US State Department to suspend and/or deny the passports of taxpayers with seriously delinquent tax debts. The IRS plans to start using this penalty in January 2018. Specifically, if you have a so called