The Internal Revenue Service (IRS) recently announced that the 2014 Offshore Voluntary Disclosure Program (OVDP) will end on September 28, 2018. The advance notice is intended to give U.S. taxpayers with undisclosed foreign financial assets enough time to use the OVDP before the program ends.
The planned end of OVDP reflects advances in third-party reporting and increased U.S. taxpayer awareness of offshore tax and reporting obligations. The number of taxpayer disclosures under OVDP has steadily declined over the years after reaching its peak in 2011. The IRS noted that offshore tax avoidance remains a top priority of the IRS.
A separate program, the Streamlined Filing Compliance Procedures, which is designed for taxpayers who might not have been aware of their filing obligations, will remain in place. The IRS noted, however, that it may end the Streamlined Filing Compliance Procedures at some point in the future.
The OVDP program was used primarily by taxpayers who did not qualify for the Streamlined Procedures or who wanted to avoid the risk of criminal prosecution. The program collected about $11.1 billion in back taxes, interest, and penalties from more than 56,000 taxpayers who participated in the program.
Full details of the options available for U.S. taxpayers with undisclosed foreign financial assets can be found here. Further information on the closing of the OVDP program can be found on the IRS Question and Answer page here.
If you have any questions about OVDP or Streamlined Procedures, please feel free to reach out to us.