May 4, 2018
Big changes coming for U.S. taxpayers with foreign assets
The Internal Revenue Service (IRS) recently announced the Offshore Voluntary Disclosure Program (OVDP) will come to an end in September of 2018. The OVDP was essentially a set of rules that outlined how United States taxpayers could voluntarily come into compliance with tax obligations for foreign assets. In exchange for voluntarily bringing these obligations into compliance, the taxpayer would face minimal penalties. This often-included freedom from criminal persecution.
Harsh consequences often result if the IRS discovered foreign assets that were not properly in compliance with United States tax laws. Consequences that can include imprisonment.
So, what’s left for those who continue to have foreign accounts that are not yet in full compliance with United States tax laws? Essentially, you have two options:
- Use the OVDP before it expires. The OVDP will expire on September 28, 2018. This gives United States taxpayers a few more months to make use of the program before it sunsets.
- Wait to see what comes next. The IRS originally offered the OVDP in 2009. It expired that same year, only to reappear in 2011. It is possible the IRS could release a new OVDP or alternate after September. Possible, but not guaranteed.
It is important to note that these are just two options anyone with foreign assets should take into consideration. Additional options for compliance may be available. Regardless of the option you may choose, it is wise for those who wish to bring their foreign assets into compliance with U.S. tax obligations to seek legal counsel.