As of 2012, the IRS has updated their Offshore Voluntary Disclosure Program (OVDP), making the process more efficient and thus encouraging more taxpayers to come forward. Because the old process is still in effect as well, this newer development gives citizens with offshore accounts an option as to how they want to report. Because each process comes with its own set of pros and cons, a deeper look into streamlined OVDP is necessary, and you should always consult with your Bethesda, MD OVDP lawyer to see if it is right for you.
Why Streamlined OVDP Came About
After three years working with taxpayers who had untaxed offshore accounts, the IRS recognized that several of the citizens who were applying for OVDP were doing so simply because they had forgotten their offshore accounts or misunderstood the tax laws. As such, they were not participating in criminal tax evasion knowingly or willfully. Because of this, the IRS developed a system whereby taxpayers with unlawful offshore accounts (but without criminal intent) were able to file their accounts with the IRS with a fraction of the penalty.
What Makes Streamlined OVDP Unique
The key to the streamlined 2012 process is intent. Because the applicants are claiming to have no criminal intent, they are able to complete a simpler, more efficient application procedure with a 5% penalty, compared to the 50% penalty associated with the 2009 process.
However, because they are claiming to have no knowledge of the crime, taxpayers applying for the streamlined process could be subject to further domestic investigation. This means that they are not exempt from criminal proceedings if the IRS determines that they are guilty of knowingly being involved in tax evasion.
Streamlined OVDP Requirements
In your application process for the Streamlined Domestic/Foreign Offshore Procedures, you must certify that your conduct was not done willfully. You must also have a valid TIN (a social security number for U.S. citizens) and not be under civil examination by the IRS.
Whether you are worried about which process you should apply for or you need help with the application process, it is imperative to contact your Bethesda tax lawyer today. At JDKatz, we have over 15 years of experience in tax law and tax evasion proceedings, so we are qualified to guide you in the right direction with your offshore accounts. Call now and see what we can do for you!