The changes give taxpayers who mistakenly failed to report foreign assets a simpler path back to tax compliance.
On June 18, 2014, the Internal Revenue Service (IRS) announced major modifications to the terms of its programs to encourage the reporting of offshore assets. The changes expand two existing programs for those with undisclosed offshore accounts and delinquent taxes — the Offshore Voluntary Disclosure Program (OVDP) and the Streamlined Disclosure Program (SDP) — and formalize another program to correct delinquent reporting only. According to IRS Commissioner John Koskinen, the newly revised process “opens a new pathway for people with offshore assets to come into tax compliance,” and “reflects a carefully balanced approach to ensure everyone pays their fair share of taxes owed.”1 The “new pathway” allows certain US resident and non-US resident taxpayers who failed to report foreign assets to take advantage of a simplified disclosure program that brings them back into tax compliance with substantially reduced or no penalties.
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