Offshore Voluntary Disclosure Program

If you have foreign bank accounts that you have never properly disclosed to the IRS, you should know that if the IRS learns about the unreported accounts the penalty is equal to 50% of the highest account balance for each year that the account went unreported. That means that any more than two years of failing to report the account will earn you penalties in excess of the total amount that ever existed in the account, as well as criminal prosecution for federal tax crimes, which means jail time. However, if the IRS is not yet aware of the accounts, then you may be able to take advantage of the IRS Offshore Voluntary Program and avoid criminal prosecution. This is a very serious situation and if it applies to you, this cannot be ignored. Please, for your own sake, read on.

What is the Offshore Voluntary Disclosure Program?

The Offshore Voluntary Disclosure Program is an initiative begun by the IRS to assist taxpayers who wish to bring their undisclosed foreign accounts or foreign entities into compliance with United States tax laws. Under this program, a taxpayer with noncompliant foreign bank accounts and assets has the potential to pre-emptively disclose the bank account to the IRS, pay any fines and penalties, and escape criminal prosecution. Internal Revenue Service, IRS Says Offshore Effort Tops $5 Billion, Announces New Details on the Voluntary Disclosure Program and Closing of Offshore Loophole, http://www.irs.gov/uac/IRS-Says-Offshore-Effort-Tops-$5-Billion,-Announces-New-Details-on-the-Voluntary-Disclosure-Program-and-Closing-of-Offshore-Loophole.

How Do I Know if the Offshore Voluntary Disclosure Program is an Option for Me?

If you have offshore bank accounts and assets that you have failed to disclose to the IRS, and the IRS has not yet contacted you regarding these accounts, then you should consider the Offshore Voluntary Disclosure Program. According to the IRS, taxpayers who voluntarily disclose their previously undisclosed offshore accounts and assets will minimize their chances of criminal prosecution. If you are a candidate for the Offshore Voluntarily Disclosure Program and you truthfully and timely complete all the requirements of the program, the IRS will not recommend you for criminal prosecution to the Department of Justice. Internal Revenue Service, Offshore Voluntary Disclosure Program Frequently Asked Questions and Answers, http://www.irs.gov/Individuals/International-Taxpayers/Offshore-Voluntary-Disclosure-Program-Frequently-Asked-Questions-and-Answers.

Should I use the Offshore Voluntary Disclosure Program?

In cases where the IRS can show that the failure to report the existence of the foreign account was “willful” and rising to the level of criminal behavior, the voluntary disclosure program provides a reasonable option. The program can help you bring your foreign accounts into compliance and you may also be able to avoid civil and criminal penalties if you voluntarily disclose your foreign assets and accounts. Charles Rettig, IRS FBAR Voluntary Disclosure and Opt Out Considerations, http://www.forbes.com/sites/irswatch/2013/07/04/irs-fbar-voluntary-disclosure-program-and-opt-out-considerations-2/.

How a Tax Attorney Can Help with the Offshore Voluntary Disclosure Program

If you have a foreign account which you have not disclosed to the IRS, your pre-emptive voluntary disclosure should be handled by an experienced tax attorney. The IRS will try to extract the maximum amount of penalties and fines from taxpayers who failed to disclose foreign assets, but an experienced tax attorney can negotiate with the IRS to minimize those amounts. A tax attorney experienced in offshore compliance will ensure that your accounts are compliant moving forward, something that the IRS will want you to demonstrate. Finally, a tax attorney experienced in dealing with the IRS can help you avoid criminal prosecution.

The Tax Lawyer - William D. Hartsock has been successfully helping clients comply with U.S. International Tax Laws and deal with issues related to worldwide taxation since the early 1980s. Mr. Hartsock offers free consultations with the full benefit and protections of attorney client privilege to help people clearly understand their situation and options based on the circumstances of their case. To schedule your free consultation simply fill out the contact form found on this page, or call (858) 481-4844.