UPDATE: IRS Offshore Streamlined Filing Procedures and OVDP

By Robert A. Ladislaw, Esq.

Updated Forms for Offshore Streamlined Filing Compliance Procedures – January, 2015

The IRS has recently issued updated certification forms in connection with its Offshore Streamlined Filing Compliance Procedures (the “Streamlined Procedures”). The updated forms include a statement from the IRS that taxpayers “must provide specific facts explaining [their] failure to report all income, and pay all tax and submit all required information returns including FBARs. Any submission that does not contain a narrative statement of facts will be considered incomplete and will not qualify for the streamlined penalty relief.”

The Streamlined Procedures are useful for certain U.S. taxpayers who have not disclosed their foreign assets or income, but did not act willfully. See our January 14, 2015 blog-post for more information.

In order to qualify for the Streamlined Procedures, the Internal Revenue Service (“IRS”) requires taxpayers to certify that their failures to report offshore assets and income, and pay the resulting tax, were not willful. This updated certification form is in response to the perception of the IRS that taxpayers were attempting to enter the streamlined program with little or no explanation to support a finding of non-willfulness.

Offshore Voluntary Disclosure Program (“OVDP”)

As discussed in our January 14 blog-post, the OVDP is recommended for non-compliant U.S. taxpayers who are unable to show that they did not act willfully. Until now, the position of the IRS was that it could rescind the current OVDP at any time. However, on January 28, the IRS announced in IR-2015-9 that the current OVDP would stay open indefinitely until otherwise announced.

There have been over 50,000 disclosures within the OVDP, and the IRS has collected more than $7 billion since the first OVDP commenced in 2009.

Solomon Blum Heymann LLP has long and extensive experience with international tax disclosures and tax dispute resolution. We have been successfully representing clients within the IRS offshore voluntary disclosure programs since 2009. We guide clients through the process of choosing the option that is most appropriate for them in their circumstances, and assist them to ensure a successful filing that will not be rejected by the IRS.

Please contact Robert Ladislaw or William Blum with any inquiries.

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