Search results for OVDP

New Streamlined Filing Procedures: A Trap For the Unwary?

I recently attended the NYU’s Tax Controversy Forum. Two of the panelists were officials from the IRS: Jennifer Best, Senior Advisor, IRS Large Business and International Division, and John McDougal, special trial attorney and division counsel, IRS Small Business and Self-Employed Division.

Both offered insight into the newly expanded streamlined filing procedures. One of the issues they addressed was why the IRS implemented the new streamlined filing procedures. In paraphrasing their response, it was “in response to criticism that there wasn’t an appropriate compliance path for individuals whose failure to report offshore accounts wasn’t willful.” In addition, the new procedures were designed to “encourage folks who are considering quiet disclosures to come in with their hands up,” avoiding the Read More

Written by | Posted in IRS • OVDP

Making Sense of the Streamlined Filing Compliance Procedures

On Wednesday, June 18, 2014, the IRS announced that it had expanded and modified the streamlined filing procedures first offered in 2012 to accommodate a broader group of U.S. taxpayers. Major changes to the streamlined procedures include the following: (1) extension of eligibility to U.S. taxpayers residing in the U.S., (2) elimination of the $ 1,500 tax threshold, and (3) elimination of the risk assessment process associated with the 2012 streamlined filing compliance procedures.

These changes are expected to ease the financial and legal pain for almost six million expatriate Americans who live and work abroad, many of whom had no clue that they had to pay U.S. taxes on their foreign income. Read More

Written by | Posted in FATCA • FBAR • International • OVDP

Hold On To Your Seats!

The Dawn of A New Day

The IRS just recently announced changes to its offshore voluntary compliance programs and it more than likely will affect you! The changes that were announced on June 18, 2014 are expected to help both taxpayers living abroad and those living within the United States come into compliance with their U.S. tax obligations.

The changes are two-fold and affect two classifications of taxpayers: those that have willfully failed to disclose foreign accounts and those who have done so innocently or without their conduct rising to the “willful” level. Specifically, the changes include an expansion of the streamlined filing compliance procedures announced in 2012. And Read More

Written by | Posted in FATCA • IRS • OVDP

Should I Stay Or Should I Go? – Part 19

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (final post of questions and answers)

XXIII. Does my case remain within the Voluntary Disclosure Practice even after opting out?

Yes. Therefore, you must cooperate fully with the examiner by providing all requested information and records. In addition, you must pay, or make arrangements to pay, the tax, Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 18

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XXII. If I opt out, will my case be referred for audit?

Yes, your case will be referred to the field for a complete examination of all issues. In that examination, the normal statute of limitations rules apply. If no exception to the normal three-year statute applies, the IRS will only be able to assess tax, penalties, and interest Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 17

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XXI. What if, after making a voluntary disclosure, I disagree with the application of the offshore penalty? What can I do?

Remember that the penalty framework for offshore voluntary disclosure and the agreement to limit tax exposure to eight years are package terms. Mediation with Read More

Written by | Posted in FBAR • OVDP

FBAR And FATCA — Two Abbreviations That Can Wrap You Around The IRS Axle

FBAR and FATCA are two important abbreviations for those who have overseas financial interests. Failure to file the FBAR report, in view of the IRS’s continuing application of FATCA, can get you into what old military veterans used to call FUBAR.

Let’s back up a bit and go over those abbreviations:

FBAR is a Foreign Bank and Financial Accounts Report. It’s a report form required by the Bank Secrecy Act. Here’s how the IRS describes it:

“If you have a financial interest in or signature authority over a foreign financial account, … exceeding certain thresholds … you [are required to] report the account yearly to the Internal Revenue Service…” Read More

Written by | Posted in FATCA • FBAR • IRS • OVDP • Tax Fraud/Evasion/Crimes

Should I Stay or Should I Go – Part 16

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XX. Does the examiner have any discretion to settle offshore voluntary disclosure cases for amounts less than the 27.5 percent offshore penalty?

No. Examiners nave no authority to negotiate a different offshore penalty. However, in limited situations, the offshore penalty can be reduced from 27.5 percent to 12.5 percent Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 15

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XIX. Must I complete and sign agreements to extend the period of time to assess tax – including tax penalties – and to assess FBAR penalties for any years that are set to expire while my application is being processed?

Yes. Agreements to extend the period of time to assess tax (including tax penalties) and Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 14

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XVIII. How can the IRS propose adjustments to tax for more than three years without either an agreement from the taxpayer or a statutory exception to the normal three-year statute of limitations for making those adjustments?

Read More

Written by | Posted in FBAR • OVDP

IRS Contemplates Reduced Penalties For Non-Willful Taxpayers With Unreported Offshore Accounts

After serving as IRS Commissioner for only a few months, John Koskinen offers hope for taxpayers with unreported offshore accounts. As the next phase of the Foreign Account Tax Compliance Act (FATCA) begins in July, in which foreign financial institutions will begin reporting information about their U.S. account holders, practitioners have questioned the fate of the IRS’ Offshore Voluntary Disclosure Program (OVDP). After all, once the banks start disclosing information, how can a taxpayer voluntarily disclose the same information and receive protections under OVDP?

One of the largest hurdles for many taxpayers is the harsh penalty structure of OVDP, particularly for those who were unaware of their reporting requirements, or in some cases, were unaware of accounts opened in their names. While most agree that true tax Read More

Written by | Posted in International • IRS • OVDP • Tax Fraud/Evasion/Crimes • Tax Policy

Should I Stay or Should I Go? – Part 13

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XVII. If I transferred funds from one unreported foreign account to another during the voluntary disclosure period, will I have to pay a 27.5 percent offshore penalty on both accounts?

No. If you can establish that funds were transferred from one account to another, you will Read More

Written by | Posted in FBAR • OVDP
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