A new IRS Large Business & International (LB&I) campaign targets US taxpayers for IRS audits focused upon OVDP declines and withdrawls from the FBAR related program. Once the IRS implemented FATCA based regulations and the associated Foreign Bank Account Reporting (FBAR) requirements US taxpayers were required to disclose all offshore bank accounts and assets to the IRS each year for accounts that exceed $10,000 accumulated balance at any point of the tax year. When it became obvious that many US taxpayers were ignoring or unaware of the requirement to provide this information the IRS provided the Offshore Voluntary Disclosure Program or OVDP. This program provided the opportunity for taxpayers to come into compliance with IRS FBAR reporting requirements without full exposure to the draconian penalties associated with failure to disclose offshore accounts or file an FBAR.
The new LB&I IRS audits focued upon OVDP declines and withdrawls will automatically target and provide the team with the returns of US taxpayers who applied for pre-clearance into the OVDP but were denied entry. Usually, taxpayers were only denied entry when the IRS or Department of Justice had already identified the taxpayer or an associated entity for a tax evasion related audit or criminal examination.
The second group targeted by the IRS audits focused upon OVDP declines and withdrawls will focus upon individual taxpayers who withdrew from OVDP participation after receiving a pre-clearance authorization but pior to acceptance into the OVDP. The IRS has provided several recent informational disclosures which clarify qualifications and restrictions associated with the original OVDP. There was not an option for US taxpayers to “opt-out” of the OVDP once they had applied and had been accepted into the OVDP.
The look-back period for these audits could exceed six years, and the potential for fines and ultimately criminal prosecution for tax evasion is quite high. If you have been contacted by the IRS for an OVDP or FBAR related audit you need the aggressive experienced representation of Allen Barron’s tax attorneys and skilled international and domestic accountants. We represent US taxpayers in IRS audits focused upon OVDP declines and withdrawls as well as all FBAR related investigations and audits. We invite you to contact us for a free consultation at 866-631-3470. Ask about the protections of the attorney-client privilege and our strategies to help protect you from penalties and interest which can exceed the present balance of accounts in quesiton.
