Name it, maim it: updated road map for offshore voluntary disclosure program.

• Author: Galyan, Ani

the IRS announced a modificalimi Julie 18 to the 20 12 Offshore Voluntary Disclosure Program ON7DP-i. Ile program is a continuation of the 2012 version witlt modified terms. The program is. hybrid criminal/civil matter and the objective of the modified 2014 program is to bring laxpavers who have used undisclosed foreign acecitiiits and undisclosed foreign entities to avoid or evade Lax into compliance with United States Lax laws. The voluntary disclosure period is the most recent eight tax years fbr which the clue date has already passed.

The modification of the prior 2012 program was a result of the implementation of the Iiireign Account 'lax Compliance Act as well as the IRS and U.S. Department of justice tdbliore enfbreement efforts. The new initiatives raise the risk or detection of taxpayers with undisclosed roreign accounts and assets.

The 2014 modified OVDP is available to taxpayers who wish to voluntarily disclose their offshore accounts and assets to avoid prosecution and limit their exposure to civil penalties, but have not done so. In addition, the IRS announced the Streamline Filing Compliance Pnwedures fbr both dc in wstic taxpayers and C.S. taxpayers residing abroad.

This following is a road map for filing an offshore voluntary disclosure with updates or new procedures under the 2014 program.

step 1: Obtaining a Preclearance to File Offshore Voluntary Disclosures

Prior to entering the program, taxpayers are required to obtain clearance from the IRS Criminal Investigation (IRS-CI Lead Development Center, which determines whether taxpayers are eligible to submit an offshore voluntary disclosure. Eligibility is determined by whether the:

* Taxpayer is the subject of criminal investigation or civil investigation;

* IRS has notified taxpayer that it intends to commence examination or investigation;

* Taxpayer is under investigation by any law enforcement agency;

* Source of undisclosed income is from illegal activity;

* IRS has served John Doe summons or made a treaty request seeking information that may identify a taxpayer as holding an undisclosed foreign account or undisclosed foreign entity:

* Taxpayer appeals a foreign tax administrator's decision authorizing the providing of account information to the IRS and lails to serxe the notice as required under existing law; and

* IRS has announced that certain taxpayer groups that have or had iccounts at specific financial institutions will be ineligible clue to U.S. government actions ill connection with the specific financial insiitution.

Taxpayers requesting a preclearancr under die 2014 OVDP Frequently Asked Questions 23 must disclose the following...