If for any reason you've delayed voluntary disclosure of foreign bank accounts and financial assets, the time to act is now.
The Internal Revenue Service (IRS) recently announced changes to the offshore voluntary disclosure program (OVDP) to encourage more participation and possibly reduce exposure for some noncompliant taxpayers. For example, penalties may be reduced from 27.5% to between 0% and 5%.
With the implementation of the Foreign Account Tax Compliance Act (FATCA) and continued offshore enforcement efforts to identify U.S. taxpayers with undisclosed foreign bank accounts, participation in the OVDP is critical. Non-disclosure may result in steep penalties, up to 50%, and possible criminal charges in certain situations.
One of the recent OVDP changes, effective on or after July 1, 2014, expands the streamlined filing procedures - making it easier for more people who may have failed to disclose foreign accounts, but didn't willfully evade taxes, to participate. Other OVDP changes include:
- Extension of eligibility to U.S. taxpayers residing in the United States
- Elimination of the $1,500 tax threshold
Please note: You may have amended returns, filed delinquent FBARS (Report of Foreign Bank and Financial Accounts), and paid related tax and interest for previously unreported income without participating in the voluntary disclosure program in the past ("quiet disclosure"); however, without following voluntary disclosure procedures you may still be subject to criminal prosecution and penalties.
If applicable, we encourage you to take advantage of the revised OVDP program now as the IRS may change the terms of the revised program at any time. Please contact Michael Deering, CPA, at Mowery & Schoenfeld for assistance or for more information at firstname.lastname@example.org or 847-247-8959.