Understanding Post OVDP Compliance

While the IRS has a (well-earned) reputation for taking a hard stance on those who fail to properly file their taxes, they also work hard to help people get back into compliance if they are willing. The Large Business and International Division (LB&I) area of the IRS has recently announced the approval of six new compliance campaigns set up specifically to help people in these difficult situations. One of the most significant updates is in the area of post-Offshore Voluntary Disclosure Program (OVDP) taxpayers. If you have gone through OVDP, make sure you read on to learn more about this new update.

History of the OVDP

The Offshore Voluntary Disclosure Program (OVDP) got its start in 2009 with the goal of helping US citizens with unreported foreign accounts and assets get back on track with their tax obligations. The program ran through September 2018, at which point it was closed down. This newly released update is meant for those who have failed to fulfill all their reporting obligations with respect to OVDP, usually because they did not keep up on the agreed-upon payment arrangements required for catching up on their owed taxes.

Post OVDP Compliance

The IRS update stated that, “This campaign addresses tax noncompliance related to former Offshore Voluntary Disclosure Program (OVDP) taxpayers’ failure to remain compliant with their foreign income and asset reporting requirements. The IRS will address tax noncompliance through soft letters and examinations.” 

They also announced that, “US Citizens and long-term residents (lawful permanent residents in eight out of the last 15 taxable years) who expatriated on or after June 17, 2008 may not have met their filing requirements or tax obligations. The Internal Revenue Service will address noncompliance through a variety of treatment streams, including outreach, soft letters, and examination.”

What Does This Mean for You?

Any taxpayer who has participated in OVDP in the past will want to take these announcements seriously. They are essentially confirming that the IRS has decided to make this area a particular priority now, and likely for several years to come. Even if you have not yet been contacted by the IRS, it can be helpful to take a proactive approach to this issue. Working with a tax attorney will allow you to determine exactly what tax obligations you may have, and what your options will be when dealing with them. Please contact us [Link to CONTACT US page] to schedule a time to go over your past, and current, tax situation to see if you may out of compliance with the IRS. 

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