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On June 18, 2014, the IRS announced major changes to the OVDP,
including a major expansion of the so-called Streamlined Program
and an increased penalties for taxpayers who held accounts at banks
that are under criminal investigation. Taxpayers who are
willing to certify that their past non-compliance was not willful
can avoid the offshore penalty altogether if they live
overseas. Residents of the U.S. face a 5% penalty.
Taxpayers who are not willing to certify that they were not willful
can still enter the OVDP under the 27.5% penalty regime unless they
are declaring accounts at one of the banks that the U.S. government
has publicly identified as being under criminal
investigation. Such taxpayers face a 50% FBAR penalty.
The IRS has dubbed the modified program the 2014 OVDP and has
released guidance, here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
