2011 IRS Offshore Voluntary Disclosure Initiative Ending Soon
The United States Internal Revenue Service (IRS) is offering those with undisclosed offshore bank accounts an opportunity to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) seeks to bring taxpayers with undisclosed foreign bank accounts - whether in the Cayman Islands, Europe, South America or Asia - into compliance with United States tax laws.
Taxpayers who have undisclosed offshore accounts are eligible to apply to the 2011 OVDI. The program requires disclosing unreported income from 2003 through 2010 and filing amended tax returns.
Value of 2009 Program to Taxpayers: Reduced Risk of Prosecution
A similar Voluntary Offshore Disclosure Program in 2009 was a success for both taxpayers and the IRS. Because of the program, taxpayers with undisclosed offshore accounts were able to accurately predict the amount of taxes and penalties they owed and the IRS was able to collect taxes on previously undisclosed income.
The real benefit to taxpayers with undisclosed offshore accounts who participate in the 2011 initiative is that they avoid criminal prosecution by successfully completing the program. Thus the OVDI offers noncompliant taxpayers a chance to get current on their taxes, significantly reduce civil penalties and avoid felony convictions and imprisonment.
Failure to Participate Means Substantial Risks
Those who do not voluntarily disclose their offshore accounts may face criminal charges if the IRS discovers the offshore accounts. Possible charges include:
- Tax evasion
- Filing a false return
- Willful failure to file the FBAR (the IRS form that discloses the offshore accounts)
- A person convicted of tax evasion faces a possible prison term of up to five years and a fine of up to $250,000 for each year. A conviction for filing a false return brings a possible prison term of up to three years and a fine of up to $250,000. A person convicted of willful failure to file an FBAR faces up to a 10 year prison term and a criminal fine of up to $500,000.
An Experienced Attorney Can Help
The terms of the 2011 OVDI are only available to those taxpayers who enter the voluntary disclosure process before September 9th, 2011. If you have an undisclosed offshore account, contact an experienced criminal defense tax attorney who can explain the OVDI. For more information, contact an attorney today.