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Any tax information or written tax advice contained herein (including any attachments) is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. (The foregoing legend has been affixed pursuant to the U.S. Treasury Regulations governing tax practice.)
The matters highlighted on this website are presented in general terms and cannot be applied without consideration of all circumstances. NSBN will provide additional details upon request and will be pleased to discuss with our clients or their attorneys the possible effects of these matters in specific situations.
Email Alert
IRS Reopens Offshore Voluntary Disclosure Program
January 17, 2012
The Internal Revenue Service (“IRS”) has reopened the Offshore Voluntary Disclosure Program (“OVDP”), a program which provides taxpayers who have undisclosed income from offshore accounts an opportunity to pay applicable taxes and limit potential penalties.
This OVDP is similar to the 2011 program, in that it allows taxpayers to avoid potential criminal prosecution by filing missing tax returns and paying taxes, penalties and interest. Unlike the 2011 program, there is no set deadline for taxpayers to apply to the 2012 OVDP. However, the terms of the 2012 program could change at any time.
The 2012 OVDP increases the highest penalty rate from 25 percent to 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. Taxpayers whose offshore accounts did not exceed $75,000 in any calendar year covered by the 2012 OVDP will be eligible for a lower 5% or 12.5% penalty. Taxpayers who feel that the penalty is disproportionate may opt instead to be examined.
Taxpayers who want to participate in the 2012 OVDP must file all original and amended tax returns and include payment for back taxes and interest for up to eight years, and must pay accuracy-related and/or delinquency penalties.
Taxpayers who have made voluntary disclosures to the IRS since the closure of the 2011 program will be eligible to participate in the 2012 OVDP.
We will advise you as more details become available. Please contact us with any questions.
