Tax Law Center Blog

Last week, late on Friday afternoon, August 26, 2011, the IRS issued a statement indicating that the due date for filing 2011 Offshore Voluntary Disclosure Initiative (OVDI) requests has been extended until September 9, 2011, due to the potential impact of Hurricane Irene. Prior to this statement, the deadline was set to occur on August 31st. The statement includes the necessary actions that must occur by September 9th, including information to be submitted to the Criminal Investigation office, as well as submitting a request for a 90-day extension to provide the full voluntary disclosure package of information. As part of this late news, the IRS issues a new FAQ #24.1, as well as revised FAQ #25.1. The IRS statement and updated FAQs regarding the OVDI are reflected on the IRS website.

At the time of the writing of this article, it was uncertain if further guidance from the government would be issued to modify the due date of those information filings that are not directly within the 2011 OVDI program, but rather are permitted to be filed due to the OVDI’s FAQs #17 and #18. These include situations where the person properly reported all taxable income but had not filed Form TD F 90-22.1, Report of Foreign Bank and Financial Account (FBAR), in prior years to report a foreign bank account or signature authority over a foreign bank account owned by an employer. Similar is permitted for delinquent Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations, and Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, where all income was reported and all tax paid on the taxable income. The relevant FAQs as originally issued indicate that these delinquent forms could be filed by August 31, 2011 with an explanation for the late filing, and that the IRS would not impose a penalty for the failure to file the information returns. The due date in FAQs #17 and #18 does not appear to have been changed as a result of the IRS’s August 26th statement. As such, it is expected that filing under those specific areas would still be due by August 31, 2011.

Given the quick nature of the developments, please watch our blog closely for any further guidance from the IRS in this area.