Most American taxpayers likely don’t even know what the acronym OVDP stands for. Those who can readily connect those letters with “Offshore Voluntary Disclosure Program,” though, probably know quite a bit about that IRS initiative. They know it simultaneously offers hope yet packs a punitive punch.
If you’ve circled September 28 on your calendar, you might be happy to see that day rapidly nearing and soon to be in the rear-view mirror. The IRS is formally dropping OVDP on that day, with tax officials citing materially declining participation as the reason for its demise. Since 2009, the program has allowed filers with undeclared overseas income to come clean, pay a fine and escape otherwise even harsher penalties (including prison time). Some people think that the program’s termination signals a softening IRS stance.
That’s a faulty view, say some commentators. We noted their take in our May 2 blog post discussing OVDP, which is that the IRS will be more likely – not less apt – to pursue suspected tax cheats sheltering overseas assets even harder following program termination. And given years of collected data on overseas accounts, the agency will be well positioned to take swift and harsh action.
A recent national business article discussing the OVDP tenure and present countdown notes an IRS promise “to continue its crackdown on foreign tax dodging.”
An aggressive agency approach might logically prompt select filers to contact an experienced legal office for candid counsel and, when necessary, diligent legal representation in a tax matter involving offshore holdings. A professional who has a complementary background as both a tax attorney and CPA might prove especially helpful in such an instance.