The IRS has reopened its Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2009 and 2011 programs. The program allows taxpayers to disclose their offshore assets to the government at reduced penalties.
Open for an indefinite period until otherwise announced, the program is similar to the 2011 program in many ways, but with a few key differences:
- There is no set deadline
- The maximum penalty has increased from 25 percent to 27.5 percent
While there currently is not a deadline for filing, taxpayers are reminded that terms of the program could change at any time going forward. For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point.
As with the prior program, participants must file all original and amended tax returns and include payment for back taxes and interest for up to eight years, as well as paying accuracy-related and/or delinquency penalties. Also, as before, individuals with offshore assets and accounts totaling less than $75,000 may qualify for the reduced penalty rate of 12.5 percent, or even a 5 percent rate.
For assistance participating in the program, contact us.
Source: IRS.gov
