Is the Offshore Voluntary Disclosure Program (OVDP) right for you?
Here’s a crash course to help you make sense of your options.
The OVDP offers a reprieve for taxpayers with foreign financial accounts who have been willfully noncompliant in reporting. Those who qualify can avoid criminal prosecution and civil penalties.
According to the IRS, taxpayers can qualify for the OVDP and the IRS Criminal Investigation’s Voluntary Disclosure Practice if:
- They have legal authority value in unregistered OVDP assets;
- These assets satisfy the requirements of IRM 126.96.36.199.
The OVDP applies an offshore fee of 27.5% to your highest foreign account balance. Even though 27.5% seems hefty, it’s generally worth the sting to avert criminal prosecution. Find further information and details regarding the offshore penalty framework and on the IRS’s website.
When filing a disclosure, time is of the essence. The IRS must receive the filing before the following occurs:
- The IRS begins a civil or criminal investigation.
- The IRS obtains news from a foreign bank regarding the possibility of disobedience regarding U.S. international tax law obligations.
If you are unsure whether you meet these standards, it may be a good idea to request a preclearance letter from the IRS Criminal Investigation.
Forms you may need to assemble your submission include:
Documents you must review and/or complete:
- Finish Form 14452, the official Foreign Account and/or asset Statement.
- Carefully examine your Offshore Voluntary Disclosure Letter as well as attachment.
- Determine and sign the document consenting to extend time to determine civil penalties.
- Adhere to the instructions for finishing consents.
To discuss all aspects of the OVDP, contact the Highland Tax Group team at 720-398-6088 or visit the HTG website.