On February 8, 2011, the IRS announced the 2011 Offshore Voluntary Disclosure Initiative (the “2011 VDI”). The 2011 VDI provides a new framework allowing taxpayers with undisclosed offshore personal and business assets a mechanism in which to disclose the undisclosed offshore assets with limited exposure to criminal prosecution and civil penalties. In response to the 2011 VDI, IRS Commissioner Douglas Shulman urged, “For those hiding cash or assets offshore, the time to come in is now.” The 2011 VDI is available through August 31, 2011 only. Taxpayers with undisclosed offshore personal and/or business assets must act quickly.

Under the 2011 VDI, taxpayers with undisclosed offshore assets have an opportunity to avoid criminal prosecution so long as the proper procedures are followed. Taxpayers will be required to do the following:

• File Amended Tax Returns for tax years 2003 though 2010 reporting previously undisclosed offshore income;

• Pay applicable income tax resulting from such undisclosed offshore income along with interest resulting therefrom;

• File all Informational Returns applicable to the undisclosed offshore assets for tax years 2003 through 2010...