IRS announces 2012 voluntary disclosure program
On January 9, 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs.
The 2012 program will be open for an indefinite period. Unlike the 2009 and 2011 programs, the 2012 program contains is no set deadline for people to apply. However, the terms of the program are subject to change by the IRS at any time with no advanced warning.
For the 2012 program, the penalty for failing to disclose their foreign bank accounts by failing to file a Form TD 90.22-1 is 27.5 percent of the highest aggregate balance during the eight full tax years prior to the disclosure. That is a small (2.5%) increase from 25 percent in the 2011 program. However, certain taxpayers will be eligible for 5% or 12.5% penalties that were available under the 2009 and 2011 programs.
Like the 2009 program, participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties (usually 20% of the additional tax owed, which is separate and apart from the Bank Secrecy Act penalty of 27.5%).
The announcement on the IRS website is available here.
The attorneys at Fuerst Ittleman have extensive experience working with taxpayers who have undisclosed foreign bank accounts and who have availed themselves of the IRSs voluntary disclosure program. You can reach an attorney by emailing us at email@example.com.