On Wednesday, June 18, 2014 the Internal Revenue Service announced sweeping changes to its Offshore Voluntary Disclosure Programs, effective Tuesday, July 1, 2014. Some taxpayers are treated much more leniently under expanded “Streamlined Compliance Procedures.” Other taxpayers are being treated much more harshly under a modified “2014 Offshore Voluntary Disclosure Program” (“2014 OVDP”) John Koskinen, IRS Commissioner, explained it this way: “It’s important to keep in mind that the IRS is seeking a balanced approach with this program, particularly in light of our other work on offshore issues. Our aim is to get people to disclose their accounts, pay the tax they owe and get right with the government.” Based on my personal evaluation and practice experience, the most important changes and features of the 2014 OVDP are:
(1) Most taxpayers domiciled and living outside the United States will take advantage of the Non-Resident Streamlined Compliance Procedures (sometimes referred to as the “SCP”). They will “certify” that their foreign bank account reports (“FBARs”) omissions and income tax-related omissions were “non-willful.” They will then pay their delinquent taxes and interest thereon for the most recent three years. They will avoid all penalties.
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Topics: Compliance, FATCA, FBAR, IRS, OVDP, Reporting Requirements
Published In: Criminal Law Updates, 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.
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