All good things must end. And apparently the IRS agrees.
It recently announced the end of its amnesty program for foreign financial accounts, the Offshore Voluntary Disclosure Program (OVDP).
If you have foreign bank accounts or other financial assets, you’re required to report them and pay any taxes due or you risk civil penalties and even criminal liability.
The IRS established the first amnesty program for foreign financial accounts in 2009. This OVDP was designed to provide a protection against criminal liability for undisclosed foreign assets and to establish the terms for resolving unpaid tax issues and civil penalties.
For a description of the major provisions of the offshore voluntary disclosure program and the process to become compliant, refer to our previous post, Own an Offshore Bank Account or Other Financial Account?
OVDP Sunset Provisions
The OVDP is closing effective September 28, 2018.
The reason? According to the IRS, there has been a significant decline in the number of taxpayers participating as well as an increase in awareness of offshore tax and reporting obligations.
This means you must send a complete and conforming voluntary disclosure submission to the IRS that is postmarked by September 28, 2018. As the submission can take a considerable time to prepare, you should contact your tax advisor immediately.
After the OVDP
If you missed the OVDP deadline, you may be able to use the ongoing Streamlined Filing Compliance Procedures instead. To do so, you must be able to certify, under penalty of perjury, that their conduct was not willful.
The IRS has stated that it will continue to provide avenues to disclose offshore noncompliance after September 28, 2018 and that additional information will be posted on irs.gov. Stay tuned.
Own foreign bank accounts or other financial assets