The Internal Revue Services (“IRS”) encourages U.S. taxpayers to voluntarily disclose and correct any errors with respect to their tax returns. Offshore Voluntary Disclosure Program (“OVDP”) is the practice of the IRS to provide taxpayer with tax criminal exposure a means to come into compliance with the law and potentially avoid criminal prosecution. OVDP is the only offshore voluntary disclosure program targeted at taxpayers who willfully failed to report and pay tax on income from undisclosed foreign assets or failed to disclose foreign assets. Voluntary disclosure does not guarantee immunity from criminal prosecution, but taxpayers can reduce their risk potential criminal prosecution by paying applicable civil penalties.
A new voluntary disclosure regime was announced in November 20, 2018, which would apply to both offshore and domestic voluntary disclosure after September 28, 2018. It is important to seek advice from a U.S. tax professional before you seek relief under OVDP. Many rules and penalties has been updated. Under the new regime the disclosure periods have been reduced from 8 years to 6 years. Civil penalties for failure to file a tax return, failure to file FBAR, and failure to file information return penalties have also been updated under the new regime.
If you are a non-compliant U.S. taxpayer living abroad or in the U.S., our attorneys can successfully guide you through the IRS voluntary disclosure program and bring you to full compliance with your U.S. tax obligations.
THEVOZ Attorneys advices clients to come into compliance with the U.S. tax law by:
- Drafting Offshore Voluntary Disclosure Letter (Forms 14457 and 14454)
- Representation in front of the IRS
- Filing amended returns with the collaboration of an accountant under Kovel Letter (preservation of attorney-client privilege)
- Appealing to IRS Office of Appeals