Opting Out of the Offshore Voluntary Disclosure Program (ODVP) – Part Two

Here are the steps that IRS examiners take before a taxpayer makes the irrevocable decision to opt out: 1. Send Status Letter to the taxpayer setting forth the status of the voluntary disclosure certification, documents required to finalize the certif1ication, and, if known, the tax, interest, and penalties likely to be due under the terms […]

Delinquent FBAR Submission Procedures

DELINQUENT FBAR SUBMISSION PROCEDURES  Some taxpayers may not need to use the Offshore Voluntary Disclosure Program or the Streamlined Filing Compliance Procedure options, but still may have a delinquent FBAR or Foreign Bank Account Report. FinCEN has established a procedure to address this problem.[1] The solution is available to those who: (1) have not filed […]

The OVDP Process – Part Four

Example of the Penalty Structure in the OVDP Process The Criminal Investigative unit is charged with assessing the penalty structure. The structure itself is nonnegotiable and the examiner lacks discretion to make any adjustments. The following is an example prepared by the IRS[1]: The values of OVDP assets are aggregated for each year and the […]

The Offshore Voluntary Disclosure Process – Part Three

Offshore Voluntary Disclosure – Interview with your examiner Typically a taxpayer participating in the Offshore Voluntary Disclosure process must at some point have a meeting with the IRS examiner assigned to the case. This meeting is likely to involve other federal agents from the Department of Treasury and the Department of Justice.  The primary purpose of […]

The OVDI Process – Part Two

The OVDI Process – After Preclearance is received If a taxpayer makes all the requisite disclosures and receives the preclearance then they must make their disclosure.  Note these guidelines are subject to change. Consult the IRS’s website for the most recent OVDI  procedures. [1] Under the IRS’s guidelines: Taxpayers or their representatives should mail their […]

The Offshore Voluntary Disclosure Process – Part One

The precise procedures under the Offshore Voluntary Disclosure process are murky at best. They resemble loading a revolver and handing it to someone with an itchy trigger finger. As other countries and their foreign financial institution buckle to the pressures of FATCA, the value of self-disclosure is beginning to lose its luster to the federal investigators. […]

Streamlined Voluntary Disclosure for Non-Residents

Eligibility: In order for non-residents U.S. taxpayers to be eligible to participate in the Streamlined Voluntary Disclosure for Non-Residents program they must: (1) Meet the applicable non-residency requirement described below (for joint return filers, both spouses must meet the applicable non-residency requirement described below) and (2) have failed to report the income from a foreign […]

Streamlined Offshore Voluntary Disclosure Penalties

A Summary of the Streamlined Offshore Voluntary Disclosure Penalties The Title 26 miscellaneous offshore penalty is equal to 5 percent of the highest aggregate balance or value of the taxpayer’s foreign financial assets that are subject to the miscellaneous offshore penalty during the years in the covered tax return period and the covered FBAR period. […]

Streamlined Voluntary Disclosure Eligibility

Streamlined Voluntary Disclosure Eligibility Requirements  In addition to having to meet the general eligibility criteria described above, individual U.S. taxpayers, or estates of individual U.S. taxpayers, seeking to use the Streamlined Domestic Offshore Procedures described in this section must: (1) fail to meet the applicable non-residency requirement described (for joint return filers, one or both […]