On March 13, 2018 the Internal Revenue Service (“IRS”) announced on its Notice 2018-52 that it will begin to ramp down its amnesty program under the Offshore Voluntary Disclosure Program (OVDP) and close the program on September 28, 2018.
The current OVDP started in 2012 and it was later modified in 2014. It allows US taxpayers to voluntary disclosure unreported foreign income and foreign bank accounts, as well as other financial assets and unreported foreign information returns.
The Streamlined Filing Compliance Procedures, a similar but different version of the Offshore Voluntary Disclosure Program, will remain in place for now. However, the IRS has stated that the end of OVDP is likely to happen at some point in the future. The delinquent FBAR submission procedures and delinquent international information return submission procedures are also to remain open for the time being.
US citizens and resident aliens with foreign income and foreign financial assets must report them on their Annual Income Tax Return and must file form FinCEN 114, also known as FBARs.
U.S. taxpayers who have undisclosed foreign financial assets can find relevant information on the options that are available to them at https://www.irs.gov/individu als/international-taxpayers/options-available-for-u-s-taxpayers-with-undisclosed-foreign-financial-assets
The implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments. Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:
Offshore Voluntary Disclosure Program;Note: The Offshore Voluntary Disclosure Program (OVDP) is closing. Refer to the OVDP FAQs for an outline of the sunset provisions.
Streamlined Filing Compliance Procedures;
Delinquent FBAR submission procedures; and
Delinquent international information return submission procedures.
The IRS encourages taxpayers to consult with professional tax or legal advisors in determining which option is the most appropriate for them.
For those who have failed to comply with the rules, we urge that you talk to an experienced international tax attorney they can assist you in filing for one of the available programs to avoid hefty penalties in case of an investigation or audit by the IRS. The tax professionals at Brunoro Law are experienced in the matter and can assist you throughout the entire process. Please contact Ms. via email Paula Brunoro at pbrunoro@brunorolaw.com.