The Offshore Voluntary Disclosure Program (OVDP) will close effective Sept. 28, 2018 due to the gradual decline in application.
Taxpayers and practitioners should remember that other programs remain available for taxpayers to utilize to cure certain filing errors, omissions and mistakes.
As the Frequently Asked Questions related to the termination of OVDP state, several submission programs remain available to taxpayers following the shutdown of OVDP. Those programs are streamlined filing compliance procedures, the delinquent FBAR procedures and delinquent international information return submission procedures.
Streamlined filing compliance procedures
These procedures are available to individuals and estates whose failure to report foreign financial assets was non-willful. The procedures differ depending whether the taxpayer resides outside or inside the United States. Additionally, the taxpayer’s returns cannot be under civil examination for any reason for any taxable year, nor is a taxpayer eligible if the taxpayer is under criminal investigation by the IRS.
Delinquent FBAR submission procedures
A taxpayer is eligible for these submission procedures if the taxpayer has not filed a required Report of Foreign Bank and Financial Account (FBAR), is not under civil examination or criminal investigation by the IRS, and has not already been contacted by the IRS about a delinquent FBAR.
A taxpayer with a delinquently submitted FBAR will avoid a penalty for failure to timely file the FBAR if the income from the foreign financial account was properly reported on the taxpayer’s return and any resulting tax was paid, and the taxpayer has not been contacted by the IRS.
Delinquent international information return submission procedures (DIIRSP)
A taxpayer may utilize DIIRSP if the taxpayer has not filed one or more required international information returns, has reasonable cause for not timely filing the information returns, is not under civil examination or criminal investigation by the IRS and has not already been contacted by the IRS about the delinquent information returns.
In addition to submitting the delinquent international information returns, the taxpayer must include a statement describing the circumstances that create reasonable cause for the delinquent filing. Within the reasonable cause statement, the taxpayer must certify that the entity for which the information returns are being filed was not engaged in tax evasion. Penalties may be assessed if a reasonable cause statement is not attached to each delinquent information return filed using DIIRSP.
RSM US LLP has a number of tax professionals with experience guiding clients through all of these submission procedures. These tax professionals are available to help guide and advise taxpayer who believe the procedures may apply the taxpayer’s specific situation.