Americans residing abroad or living domestically with overseas financial holdings have been a collectively peeved bunch for years in their dealings with the U.S. Internal Revenue Service. Legions of them have been notably put out — and rendered fearful — by agency exactions concerning their overseas financial holdings.
The cumulative stress is added to for many every time they confront any combination of these three tax-linked acronyms: FBAR, FATCA and OVDP.
Fleshed out, FBAR is the Report of Foreign Bank and Financial Account. That law has long required every deemed “US. Person” to annually report to the IRS all overseas holdings that singly or together exceed $10,000 in value (even if already recorded in a tax filing).
As for FATCA, the Foreign Account Tax Compliance Act began tacking on additional filing duties to the FBAR requirements from 2010. As a recent Forbes article notes, the combined onus of FBAR and FATCA yields potential civil and criminal penalties for an affected party that can be “distressingly long.”
As for the Offshore Voluntary Disclosure Program, U.S. filers with offshore assets will at least be buoyed by this piece of recent news: the OVDP mandate placing time limits on filers to come forward with detailed information on undisclosed foreign monies will terminate later this year.
The program will officially end on September 28 of this year. That six-month window from the present, notes Acting IRS Commissioner David Kautter, provides a final meaningful period of time during which filers “who still wish to come forward” can do so. Kautter says that the OVDP initiative is slated for closure because it has served its purpose.
Many filers will undoubtedly have questions and lingering concerns regarding the OVDP development and related issues it might raise in a larger context. They can turn for guidance and representation to a proven tax attorney having extensive experience with overseas reporting requirements.