Hope and horror. Those two extremes coexisted in a concededly strange way in the details of a long-tenured Internal Revenue Service program that was just recently terminated.
That initiative was termed the Offshore Voluntary Disclosure Program. We occasionally spotlighted the OVDP in past blog posts. Most recently, we noted in our September 17 entry that the longtime IRS mainstay was set for imminent closure.
And that indeed did occur. The agency pulled the plug on the OVDP on September 28. Our above post noted that, while many filers with overseas holdings voluntarily came forward with asset disclosures to take advantage of mitigated penalties, others eschewed the opportunity to do so. Many of them have steadfastly hoped that a post-OVDP IRS will simply lose interest in them and let concerns with overseas filers wane.
That’s not going to happen. Our September 17 post noted the views of inside commentators that the IRS “will be more likely – not less apt – to pursue suspected tax cheats sheltering overseas assets even harder following program termination.”
That belief is certainly endorsed in a recent Forbes article delving into newly operative rules that have supplanted what was provided for in the OVDP. Those mandates are now law for everything related to offshore tax disclosures in the wake of September 28. The Forbes piece stresses that “possible penalties have gone up quite significantly” for taxpayers now coming forward.
There is now a mandatory preclearance procedure, for example (the process used to be optional). Each case will be overseen by a single designated field agent, who will command far greater discretion than in times past to levy sanctions. Large additional penalties can be tacked on in cases where the IRS determines “willful” taxpayer conduct has occurred.
Select American filers with overseas holdings will always have questions and concerns regarding tax duties and penalties. They can candidly and confidentially discuss such issues with a proven estate litigation attorney/CPA who routinely promotes the best interests of diverse clientele in IRS-related matters.