IRS Ends Offshore Voluntary Disclosure Program (OVDP)
Why Was OVDP Closed?
While the program has been successful in the past, there has been a significant decline in the number of taxpayers participating as well as an increase in awareness of offshore tax and reporting obligations. The IRS has previously stated publicly that the 2014 OVDP would close at some time. Taxpayers have had the opportunity to participate in OVDP since 2009.
When Was OVDP Closed?
The IRS closed the 2014 OVDP effective September 28, 2018.
Is The IRS Shifting Away In IRS Priorities Regarding Offshore Tax Noncompliance?
Stopping offshore tax noncompliance and evasion remain top priorities of the IRS. The IRS enforces offshore compliance with tax and FBAR requirements using information received under the Foreign Account Tax Compliance Act (FATCA), the network of intergovernmental agreements between the U.S. and partner jurisdictions, automatic third-party account reporting, and other data-rich sources such as the Department of Justice’s Swiss Bank Program and various John Doe Summonses. The IRS leverages information resources using enhanced data analytics to continue to make it more difficult to evade tax by hiding offshore.
The IRS will continue to use tools besides voluntary disclosure to combat offshore tax avoidance, including taxpayer education, whistleblower leads, civil examination and criminal prosecution. While the IRS continues to use streamlined filing compliance procedures, as with OVDP, the IRS said it may end the streamlined filing compliance procedures at some point. Full details of the OVDP and streamlined procedures are available at Options Available for U.S. Taxpayers with Undisclosed Foreign Financial Assets.
Programs Still Available To Report Offshore Noncompliance
- Streamlined Filing Compliance Procedures
- Delinquent FBAR submission procedures
- Delinquent international information return submission procedures
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