|
|
The Offshore Voluntary Disclosure Program (OVDP) is a voluntary disclosure program specifically designed for taxpayers with exposure to potential criminal liability and/or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due in respect of those assets.
|
|
|
|
|
|
|
OVDP is designed to provide to taxpayers with such exposure
|
|
|
- (1) protection from criminal liability and
(2) terms for resolving their civil tax and penalty obligations.
|
|
The current OVDP began in 2014 and is a modified version of the OVDP launched in 2012 (that followed voluntary programs offered in 2011 and 2009).
The IRS announced recently it will begin to ramp down the 2014 OVDP and close the program on Sept. 28, 2018. By alerting taxpayers now, the IRS intends that any U.S. taxpayers with undisclosed foreign financial assets have time to use the OVDP before the program closes.
The number of taxpayer disclosures under the OVDP peaked in 2011, when about 18,000 people came forward. The number steadily declined through the years, falling to only 600 disclosures in 2017.
The IRS will continue to use tools besides voluntary disclosure to combat offshore tax avoidance, including taxpayer education, Whistleblower leads, civil examination and criminal prosecution.
A separate program, the Streamlined Filing Compliance Procedures, for taxpayers who might not have been aware of their filing obligations, has helped about 65,000 additional taxpayers come into compliance.
|
|
|
|
|
|
The Streamlined Filing Compliance Procedures will remain in place and available to eligible taxpayers. As with OVDP, the IRS has said it may end the Streamlined Filing Compliance Procedures at some point.
The implementation of the Foreign Account Tax Compliance Act (FATCA) and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to undisclosed foreign financial assets. |
|
| Because the circumstances of taxpayers with foreign financial assets vary widely, the IRS will continue offering the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those assets: |
|
|
|
IRS-Criminal Investigation Voluntary Disclosure Program; |
|
|
|
|
Streamlined Filing Compliance Procedures; |
|
|
|
|
Delinquent FBAR submission procedures; and |
|
|
|
|
Delinquent international information return submission procedures.
|
|
|
|
|
|
|
|
|
|
|
|
Since the OVDP’s initial launch in 2009, more than 56,000 taxpayers have used one of the programs to comply voluntarily. Those taxpayers paid a total of $11.1 billion in back taxes, interest and penalties. The planned end of the current OVDP also reflects advances in third-party reporting and increased awareness of U.S. taxpayers of their offshore tax and reporting obligations.
If you are one of the taxpayers with undisclosed foreign accounts or entities, you should make a voluntary disclosure because it enables you to become compliant, avoid substantial civil penalties and generally eliminate the risk of criminal prosecution.
Making a voluntary disclosure also provides the opportunity to calculate, with a reasonable degree of certainty, the total cost of resolving all offshore tax issues.
Those who do not submit a voluntary disclosure run the risk of detection by the IRS and the imposition of substantial penalties, including the fraud penalty and foreign information return penalties, and an increased risk of criminal prosecution.
|
|
|
Unclaimed Federal Income Tax Refunds for 2014
|
|
| Unclaimed federal income tax refunds totaling about $1.1 billion may be waiting for an estimated 1 million taxpayers who did not file a 2014 federal income tax return. |
|
|
|
|
|
If you are one of these taxpayers, to collect the money, you must file your 2014 tax return with the IRS no later than this year's tax deadline, Tuesday, April 17.
In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury.
By failing to file a tax return, you stand to lose more than just your refund of taxes withheld or paid during 2014. Many low- and moderate-income taxpayers may be eligible for the Earned Income Tax Credit (EITC). For 2014, the credit was worth as much as $6,143.
If you are missing Forms W-2, 1098, 1099 or 5498 for the years 2014, 2015 or 2016, you should request copies from your employer, bank or other payer. If you are unable to get missing forms from your employer or other payer, you can order a freewage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, you can file Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498, and IRA contribution Information. You can use the information on the transcript to file your tax return.
|
|
| In all your dealing with the IRS, not just for unclaimed federal income tax refunds or undisclosed foreign financial assets, help from a tax professional is not an option but a practical necessity. |
|
|
|
|
|
|
