Tax Law Center Blog

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 punish nor reward persons who choose toopt out. Once an opt out decision, which is irrevocable, is made, the taxpayer’s representative and the IRS agent responsible for the examination each prepare written submissions regarding a proposed penalty resolution. These submissions are reviewed by a committee of senior IRS personnel, who then decide on the nature and extent of any ensuing examination.

What are the results of OVDI/OVDP opt-outs?

Our own office’s opt-outs have ALL been successful so far (meaning that the final penalty has been substantially reduced from the OVDI 25%/27.5% penalty).

Most other tax attorneys have had few OVDP opt-out results, but from what we’ve heard from our colleagues that this is true for them as well (meaning successful results).  So at this point, all we can say yes, there have been opt-out successes.

What you want to know: should you opt-out or not?

There is no right answer. This is an area requiring very careful analysis of all risk factors. While a careful analysis is required to ascertain whether an optout is advantageous, our law office has represented numerous taxpayers with optouts with successful results.

Patel Law Offices has consulted with dozens of clients regarding opt out decisions of their OVDI applications. Patel Law Offices is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems. Our firm assists (and defends) clients and their advisors to legally disclose (and legitimize) foreign accounts.

For more info see: Reasons to Opt Out of the 2011 OVDI Program