Search results for OVDP

Should I Stay or Should I Go? – Part 12

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)

XVI. If I enter OVDP, will my voluntary disclosure be subject to an examination?

Normally, no examination will be conducted once the taxpayer enters the offshore voluntary disclosure program. However, the IRS reserves the right to conduct an examination. The normal process is for the voluntary disclosure to be assigned to an examiner who will certify its’ accuracy and completeness. The certification process is less Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 11

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)

XIV. If the amount of income that I underreported from my foreign bank account was de minimis, do I really need to enter the program?

According to the IRS, no amount of unreported income is considered de minimis for purposes of determining whether there has been tax non-compliance with respect to an Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 10

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)

XIII. I have two offshore accounts. No FBARs were filed. I reported all income from one account, but not the other. How do I report this?

The issue can be framed as follows: Must you report both accounts as a voluntary Read More

Written by | Posted in FBAR • OVDP

The IRS Gives Foreign Financial Institutions Additional Time to Register for FATCA

Under one of the provisions of the Foreign Account Tax Compliance Act (“FATCA”), withholding agents are required to withhold 30% of certain payments to a foreign financial institution (“FFI”) unless the FFI has entered into an agreement with IRS to report certain information with respect to U.S. accounts in an effort to bring an end to international tax evasion. Recently, in Notice 2013-43 and Notice 2013-31 IRB 113, the Treasury Department and the IRS extended the deadline for certain FFIs to implement certain FATCA requirements.

What is FATCA?

FATCA is an IRS initiative aimed at preventing U.S. citizens and taxpayers from avoiding paying income tax on their foreign investments and accounts. The law was enacted Read More

Written by | Posted in FATCA • FBAR • International

Should I Stay or Should I Go? – Part 9

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)

XII. I have properly reported all of my taxable offshore income. I only recently learned that I should have been filing FBARs in prior years to report my personal foreign bank account. Must I come forward to disclose this?

Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 8

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)

XI. I made a quiet disclosure by filing amended returns. Will the IRS audit me? If so, will I be eligible for OVDP?

The IRS is reviewing amended returns and could select any amended return for examination. It has identified, and will continue to identify, amended tax returns Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 7

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)

X. I failed to file an FBAR disclosing an offshore bank account in my name and failed to report income from that same account on my tax return. I subsequently filed an amended return reporting all of my offshore income. Now I’m having second thoughts and want to apply to the OVDP. Am I still eligible?

Read More

Written by | Posted in FBAR • OVDP

Lowering The Bar For Willfulness For FBAR Penalties

The IRS has authority to assert FBAR civil penalties. Before delving into the FBAR abyss, this is a good time to debunk some FBAR myths. First, there is no such thing as an FBAR penalty within the Offshore Voluntary Disclosure Program (OVDP). The FBAR penalty exists only outside of the OVDP framework. However, there is a penalty within the OVDP that is often considered to be the equivalent of the FBAR penalty. That penalty is commonly referred to as the offshore penalty. Generally, it is 27.5% of the highest aggregate balance of all foreign accounts during the disclosure period.

Second, contrary to popular belief, an FBAR violation doesn’t automatically mean that a penalty will be asserted. Examiners are expected to exercise discretion, taking into account the facts and circumstances of each case, in determining whether a penalty Read More

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

Should I Stay or Should I Go? – Part 6

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)

VII. When determining the highest amount in each undisclosed foreign account for each year or the highest asset balance of all undisclosed foreign entities for each year, what exchange rate applies?

The foreign currency exchange rate at the end of the year, regardless of when during the Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 5

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)

VI. How is the offshore penalty calculated?

The starting point is to sum up the values of all foreign accounts and foreign assets for each year. The corresponding penalty is calculated at 27.5% of the highest year’s aggregate value during the look-back period. If the taxpayer has multiple accounts or assets where the Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 4

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)

V. What years are included in the OVDP disclosure period?

(1) For calendar-year taxpayers: Read More

Written by | Posted in FBAR • OVDP

Should I Stay or Should I Go? – Part 3

Answers to the Most Frequently Asked Questions Regarding Offshore Voluntary Disclosure Program

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)

IV. What kinds of assets does the 27.5% penalty apply to?

The offshore penalty applies to: Read More

Written by | Posted in FBAR • OVDP
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