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IRS to end offshore voluntary disclosure program: 3 FAQs

The Internal Revenue Service (IRS) recently announced the Offshore Voluntary Disclosure Program (OVDP) is coming to a close. The program began in 2009 and modified versions have been used since its inception. It offers United States taxpayers the ability to voluntarily report foreign assets and come into compliance with applicable tax obligations.

When will the OVDP end? The IRS has scheduled the program to end September 28, 2018.

Why did the IRS decide to end the program? The IRS never intended the law to become a permanent fixture of the tax code. As such, the agency has stated that 2018 is the “appropriate time” to end the program.

Acting IRS Commissioner David Kautter explains the rationale behind the move, noting taxpayers have had “several years to come into compliance with U.S. tax laws under this program.”

Are there other options for compliance? Since the OVDP does not end until September, there is still time to come into compliance using this program. Additional options, such as the Streamlined Filing Compliance Procedures program, will remain after the OVDP ends.

It is unlikely the end of the OVDP will result in relaxed enforcement efforts by the IRS. IRS Criminal Investigation indicted 1,545 taxpayers since 2009 for criminal violations connected to international activities. Of these indictments, 671 were the result of international criminal tax violations. The agency will continue to pursue these violations after the close of the OVDP.

As a result, those who have an interest in foreign assets are wise to come into compliance with applicable U.S. tax laws. An attorney experienced in these matters can provide guidance and mitigate the risk of high penalties and criminal charges.  

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