By: Coleman Jackson, Attorney, CPA
March 27, 2018
Have you heard the news! On Monday, March 13, 2018 the IRS announced that it will end the Offshore Voluntary Disclosure Program on September 28, 2018.
It is likely already too late for all those people who are taking their chances and have not already made steps to enter the OVDP. Practitioners from all over the country have experienced extreme delays in getting taxpayers pre-cleared into the 2014 OVDP for months. Pre-clearance requests are taking more than 6 months these days. IRS representatives have stated that the preclearance processing unit of the IRS has long backlogs in even logging in new OVDP preclearance requests. The unit has about a 9 to 12 month back log in pre-clearance requests… so we have been told.
Taxpayers who have not taken advantage of the 2014 OVDP must act quickly. Repeat it is possible that it is now too late to act. The U.S. Treasury has been receiving directly or indirectly information from foreign financial institutions concerning U.S. persons with foreign bank accounts for about two years now. They probably already know those U.S. persons who hold foreign bank accounts. The chances of being detected with respect to foreign bank holdings are probably extremely high. In fact it might be impossible to hide from detection; and, possible federal prosecution of violators could rise.
Violators of FBAR rules by failing to timely report offshore bank accounts are subject to civil fines and criminal prosecution. Foreign Bank Accounts are reported annually on April 15th by filing Form 114 with the Financial Crimes Network. Delinquent FBARs put taxpayers in legal jeopardy. There may also be federal income tax issues involved also if the taxpayer has under-reported its income or unfiled federal tax returns. Tax fraud and delinquent FBARs are serious crimes which can result in violators spending years in federal prison upon conviction.
This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader. You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.
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