Monthly Archives: February 2015

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

Date
Posted by
Philip Falco

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 Philip Falco, CPA, Juris Doctor – Honors to discuss these new measures and how they apply to you (303) 626-7000.

 

Offshore Voluntary Disclosure Initiative (OVDI) (OVDP) Program

Date
Posted by
Philip Falco

The clock is ticking on this tax amnesty program provided by the IRS.

Countries from around the world have disclosed or are in the process of disclosing United States account holder information.  If a taxpayer is caught before entering OVDI / OVDP the penalties are draconian.  Penalties likely include criminal prosecution.

If the taxpayer has offshore accounts or properties, it is critical that the taxpayer speak with a tax attorney and not an accountant.  The accountant privilege does not apply to criminal proceedings.  However, the attorney-client privilege does apply to criminal proceedings.  The accountant could be subpoenaed to testify against the taxpayer at the criminal trial.

Philip Falco, CPA, Juris Doctor – Honors will work on your case to gain acceptance in OVDI / OVDP.

Quiet disclosures are not the answer.  This is where a taxpayer begins to file proper schedules on his or her tax return without entering OVDI / OVDP.  The IRS has specifically reserved the right to pursue criminal prosecution in these cases.

Because of the vast disclosures from foreign countries, participation in OVDI / OVDP is becoming more difficult every day.

The disclosures required for  OVDI / OVDP are massive and must be done precisely.  The worst fear would be accusation of a half-truth facing criminal prosecution.

We can prepare the required amendments to your returns and prepare the complete package to the IRS as required by OVDI / OVDP.

In the opinion of Philip Falco, CPA, Juris Doctor, the offshore initiative is the most significant tax development since the 1986 revisions to the internal revenue code that cracked down on tax shelters (revisions to passive activities and at-risk tax rules).

See our page on OVDP / OVDI