As the IRS and Department of Justice have stepped up their efforts to investigate and prosecute US taxpayers with unreported foreign assets, so too has the IRS offered opportunities for taxpayers to preemptively come forward and self-disclose such offshore assets in return for lower penalties and avoidance of criminal prosecution. While the IRS OVDP may benefit a taxpayer who clearly committed offshore tax fraud (for example, by setting up a foreign trust and a “secret” bank account in a tax haven or secrecy jurisdiction specifically to hide income from the IRS), many taxpayers with less egregious facts were swept into the OVDP and its penalty structure. The IRS faced criticism that, for example, a recent immigrant with legitimate accounts “back home”, or a taxpayer who inherited a foreign account from a foreign relative, would pay the same penalties as the tax cheat with a Panama corporation and “secret” account in Switzerland.
In response, the IRS introduced “Streamlined” disclosure procedures for taxpayers with more benign facts. The “Streamlined” disclosure procedures (one for foreign residents, one for domestic residents) have a shorter look back period and much lower penalties than the OVDP (including no penalties for foreign residents), and for these reasons the Streamlined procedures are less onerous and would be the preferred choice for coming into tax compliance. However, there are eligibility standards for being accepted into the Streamlined programs. In addition, the taxpayer has to certify that his or her conduct was “non-willful”. If the IRS disagrees, it is too late for the OVDP and there are no protections against criminal prosecution. Thus, whether to proceed with the Streamlined procedures, and how to certify “non-willfulness”, are critically important.
This webinar will discuss both the OVDP and Streamlined procedures, the differences between the two, and the benefits of each. We will discuss the eligibility requirements (including residency) for the Streamlined procedures. We will explore the concept of “willfulness”, and the risks involved in the Streamlined procedures and certification or non-willfulness. We will detail the procedures, and discuss the penalties for making a voluntary disclosure. We will also explore alternatives to making a voluntary disclosure of foreign assets. This will be an informative, detailed seminar on how to bring offshore assets into US tax compliance in the best manner possible from an experience foreign asset attorney.
Please contact us if you are interesting in participating in the Webinar on September 15, 2015.