Should I Stay or Should I Go? – Part 6

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Written by Michael DeBlis, III | Posted in FBAR • OVDP

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 year the highest account balance was reached.

VIII. I have an interest in a PFIC (passive foreign investment company). What are my options?

Within OVDP, the IRS offers taxpayers an alternative to the statutory PFIC computation. The purpose of this alternative is to resolve PFIC issues on a basis that is consistent with the Mark to Market (MTM) methodology authorized in I.R.C. § 1296 without requiring a complete reconstruction of historical data.

IX. I’m currently under examination. Can I still come in under voluntary disclosure?

No. If the IRS has already initiated a civil examination, then it’s too late. And that is true regardless of whether the examination relates specifically to undisclosed foreign accounts or undisclosed foreign entities. Similarly, taxpayers under criminal investigation by CI are also ineligible.

Next: 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?

In accordance with Circular 230 Disclosure

Michael DeBlis, III

As a former public defender, Michael has defended the poor, the forgotten, and the damned against a gov. that has seemingly unlimited resources to investigate and prosecute crimes. He has spent the last six years cutting his teeth on some of the most serious felony cases, obtaining favorable results for his clients. He knows what it’s like to go toe to toe with the government. In an adversarial environment that is akin to trench warfare, Michael has developed a reputation as a fearless litigator.

Michael graduated from the Thomas M. Cooley Law School. He then earned his LLM in International Tax. Michael’s unique background in tax law puts him into an elite category of criminal defense attorneys who specialize in criminal tax defense. His extensive trial experience and solid grounding in all major areas of taxation make him uniquely qualified to handle any white-collar case.