As Part of the Offshore Voluntary Disclosure Program or OVDP the IRS has provided new “Streamlined Domestic Offshore Procedures” for “non-willful” conduct that is in violation of FBAR and FATCA related reporting. In essence, if you are a US taxpayer residing in the United States and have under-reported foreign accounts or assets required under FBAR and other international information forms you now have a process that might help you to avoid “accuracy-related penalties, information return penalties or FBAR penalties”. The Streamlined Domestic Offshore Procedures retain the Title 26 miscellaneous offshore penalty provisions.
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> The new Streamlined Domestic Offshore Procedures are primarily intended for those US taxpayers who have not willfully misrepresented their foreign investments and accounts with the intention of avoiding US taxes. In the new provisions, the IRS specifically notes that the program is available to those who have not fully disclosed or under stated income from a foreign bank account, investment or asset (and paid appropriate US taxes) and/or failed to file or missed information on FBAR reports or associated international information forms. The IRS notes that non-willful conduct is due to an oversight, inadvertently leaving information out of IRS reporting, misunderstanding or failure to fully understand the law. These procedures have just been released and are intended to take effect to the OVDP July 1 of this year.
