Offshore Voluntary Disclosure (OVDI) Archives - Page 3 of 3

Key Takeaways

Topic: Offshore Voluntary Disclosure Introduction – Part Two
The IRS used much of the information it accumulated under the 2009 OVDP to continue investigations into individuals and financial institutions that facilitated the non-complianc….
With the investigations ongoing, many tax practitioners pressed the IRS on behalf of concerned non-complaint clients to continue the voluntary disclosure program.

The IRS used much of the information it accumulated under the 2009 OVDP to continue investigations into individuals and financial institutions that facilitated the non-compliance with U.S. tax laws. With the investigations ongoing, many tax practitioners pressed the IRS on behalf of concerned non-complaint clients to continue the voluntary disclosure program. In February of 2011 the IRS responded. It announced the 2011 Offshore Voluntary Disclosure Initiative (OVDI.) The program lasted from February 2011 until September 9, 2011. The terms of the 2011 OVDI differed from that of the 2009 OVDP. Participants in the 2011 program paid a 25% miscellaneous offshore penalty on the highest aggregate value of the unreported offshore accounts from 2003 until 2010. In addition, depending on the severity of their noncompliance, they were also exposed to a 5% or 12.5% penalty. The IRS was able to close 70% of the voluntary disclosed cases that year which resulted in 15,000 additional disclosures the collection of $1.6 billion dollars in back taxes, penalties, and interest.

[1] IRS Offshore Voluntary Disclosure Efforts Produce $6.5 Billion; 45,000 Taxpayers Participate FS-2014-6, June 2014.
[2] The Global Elite Are Hiding 18 Trillion Dollars In Offshore Banks.
[4] 2009 Offshore Voluntary Disclosure Program.

The Department of Treasury and the Department of Justice have a new mandate – stop offshore tax cheating and bring in billions of dollars of additional tax revenue from non-disclosed foreign accounts. The Internal Revenue Services’ Offshore Voluntary Tax Disclosure Program is designed to encourage non-compliant taxpayers to come clean and bring their tax liabilities current. The IRS began this initiative in 2009 with the Offshore Voluntary Disclosure Program. The Service has now sponsored three voluntary programs. The IRS reports that the efforts have yielded $6.5 billion in back taxes and brought 45,000 tax payers back into the law abiding fold.[1] It is estimated that this represents only a fraction of funds held offshore by U.S. citizens and other required U.S. income tax filers. [2]