On behalf of Silver Tax Group posted in Offshore Accounts on Thursday, March 22, 2018.
The IRS plans on bringing to a close the Offshore Voluntary Disclosure Program (OVDP) put in place in 2014. The plan is to close this program by September 28.
However, this announcement made by the IRS at least allows for Michigan taxpayers time to still take advantage of this problem. Nevertheless, the time for taking this advantage will quickly come to an end.
What closing such a program will mean to taxpayers.
More than 56,000 taxpayers have taken advantage of this program since 2009 inception. Due to this program, taxpayers paid $11.1 billion to the IRS concerning taxes, penalties and interest. The IRS states that more third-party reporting means there is less need for such a program. Also, taxpayers are becoming increasingly aware of their obligations when it comes to reporting offshore income due to the implementation of the Foreign Account Tax Compliance Act (FATCA)
While this program allowed for taxpayers to resolve potential difficulties regarding offshore reporting matters, there has been decreasing use of the program during the last few years. However, the IRS plans on providing other disclosure programs in the future.
Taxpayers can still take advantage of the Streamlined Filing Compliance Procedures program. The IRS claims 65,000 individuals who were not previously aware of their reporting obligations have used this program for relief.
Though the OVDP is going away, prosecution for noncompliance will continue. It is therefore important to seek guidance from experienced tax attorneys who can warn you of potential issues.
The IRS has at its disposal a number of ways for locating noncompliance when it comes to offshore reporting. This includes following up on whistleblower leads where other individuals report on alleged wrongdoers. Such crackdowns have led to a substantial number of criminal indictments.