IRS Announces Major Changes to OVDP

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Explore:  FBAR Income Taxes IRS OVDP

On June 18, 2014, the IRS announced major changes to the OVDP, including a major expansion of the so-called Streamlined Program and an increased penalties for taxpayers who held accounts at banks that are under criminal investigation. Taxpayers who are willing to certify that their past non-compliance was not willful can avoid the offshore penalty altogether if they live overseas. Residents of the U.S. face a 5% penalty. Taxpayers who are not willing to certify that they were not willful can still enter the OVDP under the 27.5% penalty regime unless they are declaring accounts at one of the banks that the U.S. government has publicly identified as being under criminal investigation. Such taxpayers face a 50% FBAR penalty. The IRS has dubbed the modified program the 2014 OVDP and has released guidance, here.

 

 

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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.

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