[author: Mitchell Goldberg]
On June 26, 2012, the IRS released an updated Frequently Asked Questions (“FAQ”) for the Offshore Voluntary Disclosure Initiative (“OVDI”) announced by the IRS on January 9, 2012. 
The FAQ also applies, in part, to taxpayers who entered the 2009 and 2011 voluntary disclosure programs. In general, the FAQ restates substantially all of the information contained in prior versions and incorporates the information contained in IR 2012-5 such as there is no set deadline to apply, the terms of the OVDI could change at any time, and a 27.5% miscellaneous offshore penalty will be imposed on the highest aggregate balance of all offshore assets attributable to noncompliance. Such offshore penalty is in lieu of all other offshore civil penalties that may apply outside the OVDI. In addition, the FAQ addresses some additional items in response to issues that arose in the 2009 and 2011 programs:
• FAQ #9 specifically states that the eight (8) year period covered by the OVDI does not include current years for which there has not been noncompliance. Thus, if a taxpayer’s 2011 return is on extension through October 15, 2012 and such taxpayer makes a submission to the OVDI, the submission would cover 2003-2010.
• FAQ #54 addresses Canadian registered retirement savings plans (“RRSPs”) and registered retirement income funds (“RRIFs”) when a taxpayer did not make a timely election to defer income on such accounts. The answer depends on whether the taxpayer entered the 2009, 2011, or 2012 voluntary disclosure program. In general, FAQ #54 appears to indicate that a late election will be granted if requested by the taxpayer and all necessary information is provided.
Also, FAQ #17 is again included from previous versions of the FAQ to allow taxpayers who reported all income from foreign accounts but failed to file a Form TD F 90-22.1 (“FBAR”) to file delinquent FBARs outside the OVDI and avoid penalties.
Some minor procedural changes are made as well.
Lastly, in News Release 2012-65, the IRS announced that it will start a new procedure for U.S. citizens residing overseas who are “low compliance risk.” The 
new procedure will go into effect on September 1, 2012. In general, the procedure applies to those U.S. citizens residing abroad who are not in compliance and who will have simple returns and will owe $1,500 or less in tax for any of the covered years. Taxpayers who wish to take advantage of the new procedure will be required to file delinquent tax returns along with appropriate related information returns for the past three (3) years and to file delinquent FBARs for the past six (6) years.
