As the IRS announces an end to Offshore Voluntary Disclosure programs associated with the reporting of offshore bank accounts, investments and assets, US taxpayers are urged to come into compliance with IRS FBAR reporting or face steep fines and criminal prosecution. The IRS announced yesterday it will bring the 2014 Offshore Voluntary Disclosure Program or OVDP to a close on September 28, 2018. US taxpayers have 6 months to amend all previous tax returns or face the full extent of audit, penalties and criminal prosecution for tax evasion.
“Taxpayers have had several years to come into compliance with U.S. tax laws under this program,” said Acting IRS Commissioner David Kautter. “All along, we have been clear that we would close the program at the appropriate time, and we have reached that point. Those who still wish to come forward have time to do so.”
Due to the success of FATCA and pressure brought to bear on foreign banks and financial institutions by the US Department of Justice the IRS receives automated electronic reporting from tens of thousands of institutions and sovereign tax authorities around the world. The IRS will not have to search to find your offshore accounts. Your own bank or investment house has been forced to disclose the identity of US taxpayers with accounts and information regarding specific account numbers and balances directly to the IRS. All the IRS has to do is compare this information to your own returns.
In addition, the IRS has become much more sophisticated in its understanding of the schemes, entities, accounts, trusts, foreign investments, debit and credit card accounts US taxpayers have used in the past to shelter income from US taxes. While some of this information was exposed as part of the “Panama Papers” in many cases the voluntary disclosures of tens of thousands of US taxpayers exposed common strategies.
The time is now to come into FBAR compliance as the IRS announces an end to Offshore Voluntary Disclosure programs. The IRS is receiving data from around the world and now feels it no longer needs to offer an incentive to US taxpayers. We invite you to contact the international and domestic tax experts at Allen Barron or call for a free consultation at 866-631-3470. Ask about the protections of the attorney-client privilege.