If you are considering the New IRS Voluntary Disclosure Program, what questions should you be asking of yourself and your Legal Counsel?
On November 20, 2018, the U.S. Internal Revenue Service, (IRS) issued its Memorandum that addresses the process for all domestic and offshore voluntary disclosures following the IRS’s official closing of the Offshore Voluntary Disclosure Program just this September 28, 2018.
The new voluntary disclosure practice enables U.S. taxpayers, which are:
- S. Citizen worldwide;
- S. Tax Residents in the U.S.
- Green-Card Holders
whether residing in the U.S. or abroad, with exposure to criminal liability or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due thereon, a way to comply with their Federal tax and reporting obligations, to possibly avoid criminal prosecution, and resolve their civil tax and penalty obligations.
CAUTION:
IF YOU ARE ALREADY UNDER AUDIT, EXAMINATION, OR HAVE BEEN CONTACTED BY THE IRS PRIOR OR CURRENTLY, THEN THIS OFFSHORE VOLUNTARY DISCLOSURE PROGRAM IS NOT AVAILABLE TO YOU.
IF YOU DECIDE TO PROCEED WITH THIS PROGRAM, REMEMBER THAT ALL 50 STATES AS WELL AS FOREIGN COUNTRIED WILL BE NOTIFIED OF YOUR PARTICIPATION AND MOST OF THESE OTHER TAX JURISDICTIONS DO NOT OFFER SUCH A PROGRAM AND WILL USE YOUR DISCLOSED INFORMATION TO THE IRS TO SEEK THEIR OWN COMPLIANCE FROM YOU, CRIMINAL AND/OR CIVIL CONSEQUENCES.
Individuals and corporate entities with unfiled returns or unreported income who have no exposure to criminal liability or substantial civil penalties due to willful noncompliance could come into compliance using the Streamlined Filing Compliance Procedures, the delinquent FBAR submission procedures, or the delinquent international information return submission procedures.
In future writing, I will discuss the following topic to help our readers to better understand this new Offshore Voluntary Disclosure Program;
- IRS voluntary disclosure programs
- When the Updated Program will become effective
- Should you consider using the Updated Program OR NOT!
- Are you eligible to use the Updated Program
- What benefits can be obtained through the Updated Program
- What is the disclosure period required under the Updated Program
- The role of the IRS Criminal Investigation Division in the Updated Program
- Can you still amended returns that may be subject to audit
- What types of penalties may be asserted under the Updated Program
- Can the Appeals Division of the U.S. Treasury be a beneficial tool in the Updated Program
- What about Foreign Bank Account Report filing non-compliance and the FBAR penalties work within the Updated Program
- Will Closing Agreements still be allowed under the Offshore Voluntary Disclosure Program
- Is it expected that the Updated Program will provide as much certainty as the prior Offshore Voluntary Disclosure Program
- What are the risks and consequences if a client does not use the Updated Program and the IRS subsequently notifies you of being audited
