The IRS has extended the due date for submission under the 2012 OVDP from June 30, 2014 to August 4, 2014
The IRS has made some key modifications to the streamlined filing compliance procedures and to the 2012 Offshore Voluntary Disclosure Program. The original deadline designated as June 30, 2014 is now been extended to August 4, 2014. Anthony E. Parent of Parent & Parent LLP encourage taxpayers who have never reported their foreign investments to make use of the new deadline as they will be able to elect to have their case considered under the 2012 OVDP rules.
With taxpayers can be subject to 50% penalty, Parent finds that the 2014 program is more rigorous than the 2012 OVDP. He suggests that this is the best time for them to disclose their foreign accounts within the August 4 deadline.
The FAQ 1.1 from the IRS official website describes the latest OVDP changes as follows:
Because the implementation of the Foreign Account Tax Compliance Act (FATCA) and the IRS and Department of Justice offshore enforcement efforts continue to raise the risk of detection of taxpayers with undisclosed foreign accounts and assets for the foreseeable future, it has been determined that 2012 OVDP should be modified and made available to taxpayers who wish to voluntarily disclose their offshore accounts and assets to avoid prosecution and limit their exposure to civil penalties but have not yet done so. Unlike the 2009 OVDP and the 2011 OVDI, the 2014 OVDP has no set deadline for taxpayers to apply. However, the terms of this program could change at any time.
Foreign Account Tax Compliance Act (FACTA) has come to effect on July 1, 2014 which means foreign institutions will start to report accounts held by U.S. residents to the IRS. So people who want to have protection under the lower cost domestic Streamlined program, they need to be in the 2012 OVDP. That means acting by Aug 4. If not, the IRS will assume that they were willful in failure to disclose their offshore accounts. The offer may seem tempting and an attractive option, but this is the problem with these amendments, says Anthony Parent.
While the main offshore account penalty is 27.5%, the Streamlined program offers a chance of a 5% penalty for non-willful foreign account holders who failed to disclose their accounts. This can work only for certain individuals but Parent finds that the opt-out option could be beneficial for a majority of people with non-willful conduct.
The tax attorneys at IRS Medic have depth of OVDP experience and they have helped clients with offshore tax issues, FBAR penalties and various other IRS tax problems. With numerous opt-outs submitted under the established 2012 OVDP rules, IRS Medic has helped lowering their clients’ penalties to very reasonable amounts. Contact http://www.irsmedic.com for any questions.