About IRS Voluntary Disclosure
Everything You Need to Know About IRS Voluntary Disclosure
What is the IRS Offshore Voluntary Disclosure Program (OVDP)?
The IRS Offshore Voluntary Disclosure Program (OVDP) provides certain taxpayers, businesses, trusts, partnerships and other entities in the United States and abroad the opportunity to voluntarily report previously undeclared offshore accounts or assets to the Internal Revenue Service. The IRS created the OVDP in 2009 in an effort to prevent and reduce offshore tax evasion by encouraging taxpayers to make a full and voluntary disclosure of their previously undisclosed foreign accounts. While the 2009 OVDP ended in October of 2009, the IRS established a second amnesty program in 2011 – the Offshore Voluntary Disclosure Initiative. Based on the success of its first two initiatives, the IRS launched a third generation offshore voluntary disclosure program in 2012. The 2012 OVDP is still in operation today with some key program modifications implemented by the IRS in 2016.
Can I participate in the OVDP?
The IRS has established strict rules and eligibility criteria for participation in its offshore tax amnesty program. It is important to be aware that if the federal government has already launched an examination of a taxpayer, the taxpayer will not be eligible to participate in the OVDP. This means if you have past undeclared foreign accounts or assets, you should discuss your situation with an attorney immediately. Delaying action can result in serious consequences, including severe financial fines and penalties and possible criminal prosecution.
Thorn Law Group counsels and represents individual taxpayers and businesses across the U.S. and abroad who are seeking to bring their foreign accounts and assets into full legal compliance. Our firm understands how the OVDP works and we are keenly aware of the many caveats associated with this program. Our skilled legal team will thoroughly evaluate your case and help you decide whether the OVDP may be right for you.
What are the steps are involved in the OVDP?
Navigating the steps associated with the IRS offshore voluntary disclosure program can be a challenging undertaking. The program is complicated, involves multiple steps, and generally takes about two years to complete from start to finish. If you are thinking about making a voluntary disclosure through the OVDP, you should consult with an experienced tax law attorney to help guide you through each step of the process.
There are four general steps associated with the OVDP program:
Filing a Pre-Clearance Request - Our firm will initiate the OVDP application process by preparing and filing a pre-clearance request with the IRS. The IRS will review the request and provide notification as to whether you have been cleared to make a voluntary disclosure to the government. It is important to recognize, even if you receive a pre-clearance from the IRS, this does not guarantee you will be accepted into the OVDP.
Submitting an Offshore Voluntary Disclosure Letter - After you have received pre-clearance notification from the IRS, Thorn Law Group will prepare and submit an offshore voluntary disclosure letter to the IRS. The IRS will review the letter and all associated attachments to determine whether you are accepted into the OVDP on a preliminary basis.
Preparing and Filing a Full Voluntary Disclosure Submission - If you are admitted to the OVDP on a preliminary basis, our firm will work with you to prepare and file a “full voluntary disclosure submission” with the IRS. The requirements associated with this submission are very involved and can be challenging to understand. A skilled voluntary disclosure lawyer at our firm will work with you to make certain that the IRS has all of the information it needs to review your case and accept you into the program. Once the IRS has all of the required documents and information, an IRS civil examiner will certify your information for accuracy and verify the amount of the taxes, interest and civil penalties due to the government.
Executing a Closing Agreement with the IRS - After the IRS certifies your back taxes, interest and civil penalties, you need to enter into a closing agreement with the IRS. Our legal team will thoroughly review all the terms and conditions set forth in the closing agreement and answer any questions you have before you sign the agreement.
What should I do if I am considering the OVDP?
If you are contemplating making a voluntary disclosure of an undisclosed foreign account you should seek the advice of a skilled IRS voluntary disclosure lawyer. The attorneys at Thorn Law Group are former IRS lawyers who have helped hundreds of clients resolve serious offshore tax issues by participating in IRS tax amnesty and voluntary disclosure programs. Our skilled tax law team will carefully review your case to determine whether the OVDP is the best way to bring your undeclared offshore accounts and assets into full compliance with U.S. laws and regulations. Schedule a confidential consultation with Kevin E. Thorn, Managing Partner of Thorn Law Group, today by calling one of our three offices: