Breaking OVDI News: 5% Streamlined Penalty Procedure Opened Up


In a major change to the Offshore Voluntary Disclosure Program, the streamlined filing compliance procedures with their 5% penalty, has been opened up to non-willful violators that reside in the U.S. This is to be contrasted with the 27.5% penalty applicable to the OVDI program participants.

Those participating under the streamlined procedures will not have all the benefits of OVDI participation, thus there will be advantages and disadvantages for going this route. Taxpayers and their advisors will still need to run through the various methods available to become compliant to determine which works best. Nonetheless, the new procedures promise to ease the burden on many noncompliant taxpayers.

It appears that those who have already paid penalties under the OVDI program and have a closing agreement may not be eligible to participate in the streamlined program and get penalty money back – however, we will have to see how this pans out. There will surely be many displeased past participants in the program that paid significant sums to the IRS that will feel the sting if they are unable to benefit from the substantially reduced penalties.

The new announcement is not all good news. It imposes stricter rules on those entering the OVDI, and a higher 50% penalty in circumstances where the applicable financial institution where the account was held is under government investigation.

More to come once we have had a chance to review the revised programs and parameters. However, for those that are close to finalizing OVDI programs, immediate action to defer finalization pending review of the new procedures may be recommended.

Topics:  Banks, Compliance, DOJ, IRS, OVDP, Penalties, Reporting Requirements

Published In: Finance & Banking Updates, International Trade Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles (Chuck) Rubin, Gutter Chaves Josepher Rubin Forman Fleisher P.A. | Attorney Advertising

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Charles (Chuck) Rubin
Gutter Chaves Josepher Rubin Forman Fleisher P.A.

A tax and business attorney who assists clients in preserving & enhancing individual, family &... View Profile »

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