IRS Announces New Voluntary Disclosure Program for Offshore Accounts and Assets


On January 9, 2012, the Internal Revenue Service (“IRS”) reopened an Offshore Voluntary Disclosure Initiative (“OVDI”) to give U.S. taxpayers with offshore accounts a third opportunity to disclose such accounts, pay any taxes and penalties due, and avoid criminal prosecution. With the opening of this third OVDI, the IRS remains committed to identifying taxpayers who have undisclosed offshore accounts and those involved in offshore tax evasion. The IRS is currently conducting a civil investigation of at least 11 confirmed Swiss banks, and some sources estimate the number is closer to 21. The Department of Justice (“DOJ”) has joined the IRS in pursuing criminal charges against these Swiss banks.

A U.S. person who has authority over or interest in a foreign financial account is required to disclose the account to the IRS, if the aggregate value of foreign accounts equals or exceeds $10,000. Accounts are disclosed by filing the FBAR form filed with the Treasury Department. In addition, the IRS issued a new reporting form, Form 8938, “Statement of Specified Foreign Financial Assets”. This form is required to be attached to an individual income tax return (Form 1040) for all tax years beginning with the 2011 tax year. Individuals who own certain specified foreign financial assets may need to file this new Form 8938.

For the eligible taxpayer, the 2012 OVDI offers clear benefits to encourage taxpayers to disclose offshore accounts rather than risk IRS detection. Given the potential for extremely high penalties and criminal prosecution that could be involved with non-disclosure, taxpayers who are eligible to participate in the 2012 OVDI would be well advised to consult with an attorney in connection with the decision regarding whether to enter the 2012 OVDI. Handler Thayer, LLP has significant experience in international transactions and assisting taxpayers that participated in the 2009 and 2011 voluntary disclosure programs. We are well-positioned to assist taxpayers in all facets of participation in the 2012 OVDI. Please contact us if you need assistance or have any questions regarding this opportunity

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:


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.

© Gabriel G. Tsui | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.