On February 8, 2011, the IRS announced the 2011 Offshore Voluntary Disclosure Initiative (OVDI). This initiative was preceded by the Offshore Voluntary Disclosure Program (OVDP) in 2009. Both are intended to provide an amnesty program for U.S. persons owning offshore accounts and businesses, the income from which has not been declared on U.S. tax returns.
Under the new OVDI, the IRS offers amnesty from criminal prosecution and reduced civil penalties in exchange for complete disclosure of all offshore assets and bank accounts from 2003 through 2010. Eligible taxpayers have until August 31, 2011 to file all original and/or amended tax returns and include payment (or make arrangements for payment) for the additional taxes, interest and accuracy-related penalties. In addition, the IRS typically requires a 25% "FBAR-related" penalty on the highest value of all financial accounts and/or foreign assets between 2003 and 2010. Under certain circumstances, reduced penalties may apply.
Anyone interested in an OVDI should consider the onerous civil and criminal penalties which can be imposed as a result of the failure to properly report offshore bank accounts and assets and contact a tax professional.
Kajan Mather and Barish has engaged in voluntary disclosures with the IRS and Franchise Tax Board for decades and is experienced in all aspects of the voluntary disclosure programs. Contact us for additional information.
Steve was a panel member on a presentation describing the Franchise Tax Board settlement process at the USC Tax Institute on January 25.
The IRS issued final regulations attempting to make overstatements of basis an omission of gross income for purposes of the extended six year statute of limitations. Steve won the leading case of Bakersfield Energy Partners which holds to the contrary. The IRS enacted the regulations to try to overrule the Bakersfield case. The Tax Court previously invalidated the temporary version of these regulations.
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