Taxpayers are encouraged to heed the advice of the IRS and file undisclosed assets with the government through the Overseas Voluntary Disclosure Program while it is still available.
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OVDP To Stay Open Indefinitely
2. Background On OVDP
The International Revenue Service (IRS)
has provided taxpayers with the ability
to voluntarily disclose accounts and
income that were not properly
reported in the past. This is largely a
result of the Foreign Accounts Tax
Compliance Act (FATCA) which was
passed in 2010 and came into effect
just last year. The law requires foreign
financial institutions to provide more
detailed information about U.S. citizens
who hold accounts or assets overseas.
Since the law has gone into effect, the
IRS has continued to search for
undisclosed income and accounts that
are hidden overseas and is prepared to
levy strict penalties and charges for
those who are in non-compliance.
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3. Disclosing Unreported Accounts
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However, the IRS has also issued an
invitation to any taxpayer who may not be in
compliance with the latest tax laws to
disclose their assets or income held
overseas through one of multiple voluntary
disclosure programs.
Recently, the IRS issued a news release
confirming the focus on taxpayers with
offshore accounts and encouraging
individuals to consider applying for the
Overseas Voluntary Disclosure Program.
This program is specifically designed for
taxpayers who are holding undisclosed
foreign accounts and wish to now disclose
them.
4. Disclosing Unreported Accounts (Cont.)
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The program requires taxpayers to
review the past eight years of tax
history and pay overdue taxes in
full in addition to a 20% penalty on
the full amount owed. There may
also be an additional penalty levied
based on the total of an individual’s
largest offshore account balance up
to 50% or the total account value.
This program is in addition to the
Foreign Streamlined Program,
which is only open to those who
can certify that their failure to
comply was entirely non-willful.
5. The Time Is To Act Now
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According to the news release, the IRS
wants to make it clear that the OVDP
will continue to be open to new
applicants indefinitely. However, this is
not an invitation for taxpayers to
procrastinate necessary disclosures.
The IRS encourages all taxpayers to
bring their financial matters into
compliance as soon as possible and is
actively investigating individuals who
may be guilty of tax avoidance through
overseas accounts.
6. Questions
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If you have questions regarding your tax
compliance situation, you should consult
a tax attorney or professional tax law
firm. The time to act is now while such
disclosure programs are still available.
7. ABOUT FREEMAN TAX LAW
Freeman Tax Law is a boutique tax law firm with
national exposure equipped to handle all domestic
and international tax law matters. At Freeman Tax
Law, the attorneys and professional staff have vast
experience with foreign tax compliance, international
tax planning, and resolving tax controversies
involving offshore banking matters. Freeman Tax
Law helps taxpayers and foreign entities become in
compliance with laws such as Foreign Account Tax
Compliance Act (FATCA) and Offshore Voluntary
Disclosure Program (OVDP). In addition to handling
complex tax controversies, the Freeman Tax Law
team has extensive expertise in assisting clients with
wealth management and estate planning.
8. Our Locations
International
Locations:
Basel, Switzerland
Bern, Switzerland
Geneva, Switzerland
Zurich, Switzerland
Atlanta, Georgia
Austin, Texas
Birmingham, Michigan
Boston, Massachusetts
Charlotte, North Carolina
Chicago, Illinois
Cleveland, Ohio
Dallas, Texas
Denver, Colorado
Greenwich, Connecticut
Houston, Texas
Irvine, California
Las Vegas, Nevada
Los Angeles, California
Miami, Florida
New York, New York
Palo Alto, California
Phoenix, Arizona
Pleasanton, California
San Antonio, Texas
San Diego, California
San Francisco, California
San Jose, California
Short Hills, New Jersey
Tampa, Florida
Washington DC