2012 OVDI program is the third in a series of offshore volunteer disclosure programs. Program has been put in place to make Individuals and Businesses to come in compliance of undisclosed foreign financial assets. It is one of a wide range of tax issues IRS is working on both within the country and internationally.
With the success of previous OVDI programs, IRS is clear that US residents have significant foreign financials assets in foreign countries. IRS confirmed that they have collected over $5 billion dollars from previous OVDI programs, but only small amount of residents have taken advantage of the program so far. All this means IRS will only pursue this matter more seriously and as we have seen that the penalties are only increasing with each successive program.
US citizens or residents who may have missed the deadline to file the FBAR (foreign bank account reporting) or any other deadline to comply with US Tax Laws regarding the disclosure of foreign bank account such as form 8938 or even missed reporting foreign income including foreign rental income should evaluate their options apart from OVDI and try to become compliant. Failure to disclosure foreign assets or include foreign income in tax filing can result in civil and criminal penalties.
OVDI and Streamlined Filing Compliance Procedures give individuals and businesses to apply for relief from such civil and criminal penalties. Under these programs you are required to file amended tax returns and prior years FBAR filings apart from paying the respective program penalties and interest and penalties on back taxes.
Contact our office for an appointment with Sanjay Muppaneni CPA to discuss your specific case and to understand the right option for your specific case.
Additional Resources:
Offshore Voluntary Disclosure Program Frequently Asked Questions and Answers 2014
How to Make an Offshore Voluntary Disclosure
Streamlined Filing Compliance Procedures
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