OVDP – Page 4 – Tax, Estate Planning & Probate Law Center

National Taxpayer Advocate Criticizes IRS over handling of offshore voluntary disclosures

18 Feb 13

The 2012 National Taxpayer Advocate (NTA) Annual Report to Congress criticized current IRS practices in the Offshore Voluntary Disclosure Program (OVDP) that hinder voluntary compliance by penalizing taxpayers who are entitled to a reasonable cause exception from willfulness. One of

Appeals of penalties imposed during the Offshore Voluntary Opt-Out

09 Feb 13

When a taxpayer has a tax increase though a civil tax audit (or examination, in IRS terminology), a taxpayer has the right to appeal that increase administratively and through court, if unsuccessful administratively. For taxpayers not willing to accept the

National Taxpayer Advocate Identifies OVDP Program as a Serious Problem

01 Feb 13

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

HSBC Payment of Largest Penalty and FATCA Encourages Taxpayers to Disclose

30 Jan 13

Last month, HSBC Holdings agreed to pay $1.92 billion in fines to U.S. authorities, which is the largest collective settlement in the Treasury Department’s history. The penalty assessment was based upon HSBC’s conduct in violation of the Bank Secrecy Act

Bank Leumi: Another Foreign Bank Recommends the IRS Voluntary Disclosure Program

23 Jan 13

Bank Leumi is urging its U.S. clients to disclose information about their accounts to U.S. authorities investigating Leumi and many other foreign banks over possible tax avoidance by Americans. In a December 16 letter Leumi urged U.S. clients to enter

Another HSBC Customer Likely Going to Jail

11 Jan 13

Last week a New Jersey client of HSBC Holdings Plc (HSBA) pleaded guilty to charges that he hid as much as $4.7 million through Swiss and Indian accounts not declared to the U.S. Internal Revenue Service. Sanjay Sethi, 52, who

New Comments of the IRS’ New Streamlined Filing Compliance Procedures for Non-Resident Non-Filer U.S. Taxpayers

22 Dec 12

I just returned from the American Bar Association Section of Taxation’s annual National Institute on Criminal Tax Fraud in Las Vegas. A topic of discussion was the relatively new New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers (see

Benefits and consequences of entering or failing to enter the Offshore Voluntary Disclosure Initiative program

29 Nov 12

Over the past several years our law firm has counseled hundreds of non-compliant U.S. taxpayers in the exploration of their legal options with respect to the Offshore Voluntary Disclosure Initiative programs. As a result, we have succinctly summarized some of

2012 Offshore Account Criminal Tax Cases

19 Oct 12

The Department of Justice continues to prosecute cases involving United States taxpayers who have failed to report their interests in offshore accounts. Most of the cases are for large offshore accounts, but they provide good guidance for what the US government

IRS Notices for OVDI Program

12 Oct 12

When the IRS receives payment with amended tax returns for taxes, interest and penalties, the IRS may misapply the payment. This results in IRS notices. Reminiscent of the mistakes of the 2009 OVDP, the IRS now appears to be applying

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

09 Oct 12

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

Foreign Account Tax Compliance Act (FATCA): More Information Sharing Agreements Expected

27 Sep 12

FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in

2 recent IRS developments that will impact Indian Americans

16 Sep 12

Our firm was quoted last week in the Times of India newspaper: 2 recent IRS developments that will impact Indian Americans Deepa Venkatraghvan Sep 10, 2012, 07.54PM IST In the last few years, the US Internal Revenue Service (IRS) has been focusing heavily

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

02 Sep 12

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

Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers

01 Sep 12

The IRS has 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.

Another foreign bank customer found guilty of foreign income under-reporting and FBAR violations.

25 Aug 12

A doctor has been convicted of failing to disclose to US federal authorities that he maintained offshore HSBC bank accounts in India and France and hid approximately $8 million in secret foreign bank accounts. Dr. Arvind Ahuja of Wisconsin was

The “Quiet” or “Silent” Disclosure

21 Aug 12

Our office consults with many clients in determining whether they need to enter into the 2012 IRS Offshore Voluntary Disclosure Program. Because of the high 27.5% penalty in the 2012 OVDP program, many of our clients are considering alternative options

IRS Publishes Useful Chart Outlining Compliance Options for Offshore Assets

18 Aug 12

The IRS has recently published a useful chart outlining options available to help US taxpayers with offshore interests. The new IRS chart correctly states that it “recognizes that its focus on offshore enforcement efforts and related disclosure programs has raised

To Opt Out or Not Opt Out: That is the Question

13 Aug 12

When is it appropriate to make a quiet disclosure vs. making a disclosure through the Offshore Voluntary Disclosure Program? This question is not necessarily easy to answer. IRS agents handling OVDI/OVDP cases do not have discretion regarding offshore-related information return

Explore the OVDI opt-out option: Argue for Penalty Mitigation

08 Aug 12

The revised IRS OVDP FAQs offer helpful guidance on the opt-out option. The newly revised FAQs illustrate the pros and cons of opting out with six examples. See FAQ 51. The examples describe situations in which it may be smart

Opting Out of the OVDI Program: Argue for No Penalty and a Warning Letter

27 Jul 12

The revised IRS OVDP FAQs offer helpful guidance on the opt-out option. The newly revised FAQs illustrate the pros and cons of opting out with examples. Depending on the circumstances, we sometimes recommend some clients to opt out of the

IRS collects over $5 billion in its its offshore voluntary disclosure programs

21 Jul 12

The Internal Revenue Service (IRS) has announced that its offshore voluntary disclosure programs (OVDPs) have collected more than $5 billion, and that it has tightened the eligibility requirements of the third program it opened in January this year. “We continue

Full Analysis of Updated 2012 OVDP Program

15 Jul 12

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

IRS offers tax opportunity to Americans living abroad

11 Jul 12

Many Americans (including US citizens and US green card holders) living abroad will get a small reprieve from U.S. Internal Revenue Service rules on reporting foreign assets, the agency announced on Tuesday. The IRS said it would allow some U.S.

OVDP Ineligibility Possibility Increases

27 Jun 12

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.

IRS Announces Penalty Mitigation for Smaller US Taxpayers Living Abroad

27 Jun 12

The Internal Revenue Service appears to have finally created a process to finally separate small non-resident (foreign resident) US taxpayers from larger non-resident US taxpayers at the front end, and not force everyone through the OVDI/OVDP programs. Yesterday, the IRS

OVDI: Requesting issuance of a FBAR warning letter instead of penalties

29 May 12

In a Tax Notes Today report of statements made at the Eastern Pennsylvania Working Together Conference in Malvern, PA, Jason Kuratnick, IRS Associate Area Counsel (Philadelphia), Small Business / Self-Employed Division is reported to have said: The IRS may send

Opting-out of the Offshore Voluntary Disclosure Initiative: FBAR Penalty Mitigation Guidelines

19 May 12

Depending on the circumstances, we sometimes recommend some taxpayers to opt out of the voluntary disclosure initiative and allow us to demonstrate the absence of willfulness and avoid the normal FBAR penalty regime. We have been aggressively pursuing OVDI opt-outs

The legal standard of “willfulness”: Opt out to avoid high penalties

01 May 12

Under IRS Form 1040, at the bottom of Schedule B, Part III, on Page 2, Question 7(a) states: “at any time during the previous year, did you have any interest in or signatory or other authority over a financial account

Should I close my foreign account?

23 Apr 12

Suppose you have a foreign bank account holding more than $10,000. You may have inherited it, used it to hide money during a dispute with your spouse or business partner, or just done it on a whim. As you try

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