{"id":167,"date":"2012-01-10T15:03:22","date_gmt":"2012-01-10T09:33:22","guid":{"rendered":"http:\/\/www.nsglobal.com\/blog\/?p=167"},"modified":"2012-01-31T14:22:09","modified_gmt":"2012-01-31T08:52:09","slug":"usa-tax-amnesty-program-ovpd-reopens","status":"publish","type":"post","link":"https:\/\/www.nsglobal.com\/blog\/?p=167","title":{"rendered":"USA Tax Amnesty Program OVPD Reopens"},"content":{"rendered":"

The Internal Revenue Service on January 9<\/span>th<\/span><\/sup>, 2012 reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes.<\/span><\/p>\n

The IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion.\u00a0 This program will be open for an indefinite period until otherwise announced.<\/span><\/p>\n

The program is similar to the 2011 program in many ways, but with a few key differences. Unlike last year, there is no set deadline for people to apply.\u00a0 However, the terms of the program could change at any time going forward.\u00a0 For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers \u2013 or decide to end the program entirely at any point.<\/span><\/p>\n

Since the 2011 program closed last September, hundreds of taxpayers have come forward to make voluntary disclosures.\u00a0 Those who have come in since the 2011 program closed last year will be able to be treated under the provisions of the new OVDP program.<\/span><\/p>\n

The overall penalty structure for the new program is the same for 2011, except for taxpayers in the highest penalty category.<\/span><\/p>\n

For the new program, the penalty framework requires individuals to pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts\/entities or value of foreign assets during the eight full tax years prior to the disclosure. That is up from 25 percent in the 2011 program. Some taxpayers will be eligible for 5 or 12.5 percent penalties; these remain the same in the new program as in 2011.<\/span><\/p>\n

Participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and\/or delinquency penalties.<\/span><\/p>\n

Participants face a 27.5 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty. Smaller offshore accounts will face a 12.5 percent penalty. People whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the new OVDP will qualify for this lower rate. As under the prior programs, taxpayers who feel that the penalty is disproportionate may opt instead to be examined.<\/span><\/p>\n

The IRS is currently developing procedures by which dual citizens and others who may be delinquent in filing, but owe no U.S. tax\u00a0may come into compliance with U.S. tax law. The IRS is also committed to educating all taxpayers so that they understand their U.S. tax responsibilities.<\/span><\/p>\n

More details will be posted on our blog, as it becomes available.<\/span><\/p>\n

Official announcement can be read here <\/span>http:\/\/www.irs.gov\/newsroom\/article\/0,,id=252162,00.html?portlet=108<\/span><\/a><\/span><\/span><\/p>\n

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