IRS Ends Offshore Account Voluntary Disclosure Program

The IRS recently announced that it is ending its Offshore Voluntary Disclosure Program (OVDP) on September 28, 2018. 

The OVDP is a voluntary disclosure program designed to allow taxpayers with undisclosed income from offshore accounts to come forward, pay taxes on their undisclosed income (and in some cases a penalty), while in the vast majority of cases avoiding the harshest penalties and criminal prosecution. 

The IRS specified that it made the announcement now to give taxpayers a window in which to still come forward and take advantage of the program before it ends. The IRS is ending the program because, while successful in the past, there has been a significant decline in the number of taxpayers participating in the program and an overall increase in awareness of offshore tax and reporting obligations. In order to participate in the OVDP before it ends, a taxpayer must submit a complete offshore voluntary disclosure that meets the OVDP requirements, that is not partial or incomplete, and that is postmarked by September 28, 2018.

The IRS has said that following the conclusion of the OVDP it will continue efforts to locate taxpayers who fail to disclose foreign accounts with the use of taxpayer education, criminal prosecution, civil examinations, and whistleblowers. In other words, the discontinuation of the OVDP does not signal a shift in IRS priorities.

If you would like to come forward to disclose offshore income, or just want to discuss the possibility of doing so, please contact Rob Ravenelle at 207.791.1294 or rravenelle@pierceatwood.com, Kris Eimicke at 207.791.1248 or keimicke@pierceatwood.com, or Christina Berkow at 207.791.1196 or cberkow@pierceatwood.com.