Search results for OVDP

How To Mount A Tax Defense For Unreported Crypto Income

On February 23, Coinbase, a popular U.S.-based digital currency exchange, notified 13,000 of its customers that it would be turning over their account information to the IRS. The notice was precipitated by a U.S. District Court ruling in a protracted John Doe Summons battle between the company and the IRS concerning accounts with potentially unreported cryptocurrency income.

Ultimately, the Court found that the IRS was entitled to the information.

The Coinbase summons battle is reminiscent of aggressive tax enforcement efforts pursued by the Department of Justice to ferret out U.S. taxpayers holding unreported income and assets abroad. That initiative also began with the issuance of a John Doe summons, but to a Swiss bank, UBS, for unreported foreign account information.

The IRS and DOJ then quickly expanded to other foreign banks and other countries. With the offshore voluntary disclosure program (“OVDP”) winding down, there are strong indications that the IRS will be turning its attention to unreported cryptocurrency transactions.

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Written by | Posted in TaxConnections

IRS Reminds Those With Foreign Assets About U.S. Tax Obligations

WASHINGTON — The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account to remember the upcoming deadline that applies to reports for these accounts, often referred to as FBARs.

Here is a rundown of key points to keep in mind:

Deadline For Reporting Foreign Accounts Read More

Written by | Posted in FBAR • IRS • OVDP • TaxConnections

IRS Reminds Those With Foreign Assets About U.S. Tax Obligations

WASHINGTON — The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account to remember the upcoming deadline that applies to reports for these accounts, often referred to as FBARs.

Here is a rundown of key points to keep in mind:

Deadline For Reporting Foreign Accounts Read More

Written by | Posted in Foreign Assets • IRS

A Discussion Of Belated Alternatives To The Offshore Voluntary Disclosure Program And Recommendations For Further Improvements (Part 3 of 3)

In the first blog in this series we discussed how those who participate in amnesties also tend to be people who made inadvertent errors, that is, “benign” actors, rather than bad actors. We discussed how it can make sense to offer some form of amnesty before implementing a sudden increase in penalties or enforcement. Otherwise, the increase is more likely to be viewed as unfair and erode trust for the government. Moreover, a decline in trust can erode voluntary compliance.

In the second blog, we cited data showing that, consistent with the research on amnesties, IRS’s first amnesty alternative – the Offshore Voluntary Compliance Initiative (OVCI) – generally attracted people who failed to report offshore accounts but had paid their taxes or had under-reported small amounts. Read More

Written by | Posted in IRS • OVDP

An Analysis Of Tax Settlement Programs As Amnesties – Why IRS’s Offshore Voluntary Disclosure Settlement Programs Posed Risks To Voluntary Compliance (Part 2 of 3)

In last week’s blog, we discussed how broad amnesties can blunt economic deterrence, but narrow amnesties or amnesty alternatives (e.g., amnesties that forgive only penalties before noncompliance is detected) do not necessarily have the same negative effects. We also cited research suggesting that those who participate in amnesties also tend to be people who made inadvertent errors (i.e., “benign” actors, rather than bad actors). Furthermore, without an amnesty, a sudden increase in penalties or enforcement is more likely to be viewed as unfair and erode trust for the government – a view that can erode voluntary compliance. Read More

Written by | Posted in IRS • OVDP • Tax Amnesty • TaxConnections

The Party Is Ending For The IRS Offshore Voluntary Disclosure Program

On March 13, 2018. the Internal Revenue Service announced that it is ending the Offshore Voluntary Disclosure Program on September 28, 2018. The IRS has made the announcement to allow time for taxpayers who have undisclosed foreign financial accounts and assets to enter into the program and make a OVDP voluntary disclosure before the program ends.
OVDP Program

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Written by | Posted in IRS • Offshore • OVDP

Analysis Of Tax Settlement Programs As Amnesties (Part 1 of 3)

On March 13, 2018, the IRS announced that on September 28, 2018, it would end the offshore voluntary disclosure program (OVDP), as it had only attracted 600 applicants in 2017. So now is a good time to take a step back to review the program in the broader context of the research on tax amnesties.

Settlement programs and other voluntary disclosure or correction programs generally offer some form of amnesty. Offering broad tax amnesties on a regular basis, as many states do, can erode voluntary compliance. Read More

Written by | Posted in IRS • Offshore • OVDP • Tax Amnesty

Options Available For U.S. Taxpayers With Undisclosed Foreign Financial Assets

The implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments.  Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:

  1. Offshore Voluntary Disclosure Program;
    Note: The Offshore Voluntary Disclosure Program (OVDP) is closing. Refer to the OVDP FAQs for an outline of the sunset provisions.
  2. Streamlined Filing Compliance Procedures;
  3. Delinquent FBAR submission procedures; and
  4. Delinquent international information return submission procedures.

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

US Expats Renouncing American Citizenship – What You Need to Know

Americans living abroad are still required to file a US tax return, reporting their worldwide income, as well as obey the tax rules in the country where they live.

Many US expat have settled abroad permanently though, and they justifiably wonder why they must continue filing a US tax return every year, even if they don’t pay any US taxes because they claim one or more of the exemptions available to expats, such as the Foreign Earned Income Exclusion or the Foreign Tax Credit, when they file.

As a result, many US expats consider renouncing their American citizenship.

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Written by | Posted in Expatriate • United States

The OMG Moment And Dealing With U.S. Citizenship Problems

As I write this post, my mind goes back to one of my very first posts about U.S. compliance issues. This post was called “What you should consider before contacting a lawyer.” Since that time I have written hundreds of post describing the problems faced by Americans abroad.

More recently

In this first post of this series, I explained the importance of the Canada U.S. tax treaty and how it provides “some protection” to Canadian citizens from U.S. tax debts.

In the second post, I explained some of the characteristics of the OVDP program and how Mr. Dewees got caught in it.

In this post, I am suggesting some possible lessons that can be learned from the story of Donald Dewees. Read More

Written by | Posted in Citizenship

What You Need To Know About Voluntary Disclosure

There are around 9 million Americans living oversees, and the IRS has its sights set on those expats who aren’t up to date with their U.S. tax filing.

All American citizens and green card holders are required to file a U.S. tax return, however because the U.S. is the only developed nation to tax its non-resident citizens, many haven’t realized that they have to file. Read More

Written by | Posted in International

The Canada-U.S. Tax Treaty Does Not Protect From Tax Liability

Dewees 1: The Canada-U.S. tax treaty does NOT protect Canadians from U.S. tax liability but does mean that Canada will NOT assist the U.S. in collection!

There are certainly benefits to being a Canadian citizens. Perhaps Canadian citizenship is the most important line of defense against the confiscation that is OVDP. Read More

Written by | Posted in Canada
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