OVDP - The Offshore Voluntary Disclosure Program
The Offshore Voluntary Disclosure Program (OVDP) is a filing with the government to reduce or eliminate penalties for non compliance of tax reporting requirements.
The Internal Revenue Service announced on June 26, 2012 that collections from taxpayers had exceeded 5 billion U.S. Dollars with the implementation of its offshore voluntary disclosure program.
Over $5 billion in back taxes, interest and penalties have been collected from about 33,000 voluntary disclosures.
That number, although staggering is small compared to the penalties that could have been assessed had the taxpayers not come forward voluntarily as the civil penalties would have been significantly higher, to say nothing of potential criminal charges.
To give some perspective, the penalties could be as high as 50% of the annual highest aggregate balance of the Foreign Bank and Financial Accounts for every year the taxpayer did not comply with the filing requirement as compared to zero to 27.5% of the highest aggregate balance during the review period through the voluntary compliance program.
Under the current voluntary disclosure plan the penalty can range from no penalty at all up to 27.5% of the highest annual aggregate balance over the prior eight years, with the prospect of no potential criminal charges if the taxpayer is approved for the voluntary disclosure plan.
As compared to not disclosing and the IRS independently finding the foreign bank and financial accounts there could be up to a 400% penalty on the balances over the eight year period (50% per year for eight years).
As stated elsewhere, each taxpayer’s situation is different and must be evaluated carefully by professionals as penalties could be much lower than 27.5% and in some cases there could be no penalty at all.
As indicated on other pages, it is important for your individual situation be evaluated by an experienced tax professional team which includes a CPA (Certified Public Accountant) and Attorney to guide you through the Disclosure process.
please email firstname.lastname@example.org or call (619) 280-9400