Breaking News: IRS Changes to the Offshore Voluntary Disclosure Program (OVDP)

IRS Reduces OVDP Penalty to 5% in non-willful offshore compliance cases.

For eligible U.S. taxpayers residing in the United States, the only penalty will be a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that gave rise to the tax compliance issue.

Other positive changes for taxpayers living in the United States:

  • Eliminating a requirement that the taxpayer have $1,500 or less of unpaid tax per year;
  • Eliminating the required risk questionnaire;
  • Requiring the taxpayer to certify that previous failures to comply were due to non-willful conduct.

The IRS increases its effort to make OVDP accessible to everyone.  This is a step in the right direction.  The goal is to get taxpayers in compliance.

Non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.

Other good news: If you made an OVDP submission prior to July 1, 2014 you may elect to have your case considered under Streamline so long as a closing agreement has not been executed.

We specialize in Offshore Account Compliance. We represent taxpayers entering the 2012 Offshore Voluntary Disclosure Initiative Program (OVDP)

See our page on OVDP / OVDI

Please contact Tax Attorney Philip Falco, Attorney, CPA to discuss these new measures and how they apply to you (303) 626-7000.