Brown, PC
Main Menu
Search
Schedule Your Initial Consultation:
888-870-0025
View Our Practice Areas

Pros and cons of the IRS’ new voluntary disclosure process

The sunset of the Offshore Voluntary Disclosure Program (OVDP) in September of 2018 left many taxpayers wondering how the Internal Revenue Service (IRS) would handle future disclosures. Would the IRS choose to renew the program? Would another take its place? The agency recently provided some guidance.

Can taxpayers voluntarily come into compliance? Yes, taxpayers can still voluntarily bring foreign assets into tax compliance in exchange for a decreased risk of criminal prosecution.

What has changed? The new process is different from the previous OVDP. One notable change is the disclosure period. In the past, the IRS would look back through eight years of a taxpayer’s tax filings to ensure compliance. The agency has shortened this period to six years — with the caveat that the IRS can extend this period.

Another change involves the potential for increased penalties. For example, the penalty the IRS applies to a taxpayer accused of an underpayment of tax has increased from 20 percent to 75 percent. Tax professionals expect the IRS to provide additional guidance on application of penalties in the near future.

Although taxpayers may find themselves responsible for increased financial penalties under the agency’s new voluntary disclosure process, the benefit of reduced or eliminated criminal penalties remain. As such, the option is still viable for many taxpayers. This process is just one of many options for taxpayers that look to come into tax compliance. An attorney experienced in foreign asset tax compliance can review your situation and discuss the pros and cons of each option.

No Comments

Leave a comment
Comment Information
Print this Page
Email Us For A Response
Set Up An Initial Consultation Now: 888-870-0025

Work Directly With Us

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy