In his article, Sanford Millar discusses the case that some taxpayers may soon face if they have not disclosed foreign assets or income. Those individuals who did not take advantage of the Offshore Voluntary Disclosure Program or the IRS’s Streamlined Procedures in order to disclose foreign offshore holdings are likely to face serious consequences in the form of a civil audit. Millar begins,
Since 2009, the Offshore Voluntary Disclosure Program (OVDP) has been available to Taxpayers who have foreign assets, foreign financial accounts, and foreign source income unreported for U.S. Income Tax and Bank Secrecy Act purposes. In addition, in June of 2014 the IRS announced the Streamlined Procedures to further encourage Taxpayers to come forward and remedy prior failures to disclose foreign assets and foreign income. With the release of Panama Papers, those U.S. citizens and permanent residents who did not take advantage of the OVDP and the Streamlined Procedures, an IRS civil audit may be in the horizon. There is also risk of criminal investigation relating to the foreign offshore holdings.
If you received communication from the IRS and suspect the communication may be related to your offshore holdings you are ineligible for the OVDP. Additionally, once you are contacted by the IRS, it is not advisable that amended returns be filed under the Streamlined Procedures. At this point, the Taxpayer should contact an attorney to determine the income tax and penalty exposure related to the foreign assets and unreported income.
Read the entire article here: You Skipped OVDP, now the IRS has initiated an Audit
Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal