The Internal Revenue Service reopened its Offshore Voluntary Disclosure Program to encourage more taxpayers with assets in undeclared foreign bank accounts to come forward.
The IRS has introduced a series of such programs in recent years, and this is the third program. Unlike the two previous iterations, the program is set to last for an indefinite period of time. The IRS needed to extend both of the previous OVDP programs beyond their original deadlines in 2009 and 2011.
However, the IRS said that hundreds of taxpayers are continuing to come forward with disclosures. So far, the IRS has collected $4.4 billion under the two programs, with $3.4 billion under the 2009 program and $1 billion under the 2011 program. The IRS is continuing to collect money under both programs, though it has already closed about 95 percent of the cases still left over from the 2009 program.
The 2011 program had stiffer penalties for taxpayers than the 2009 program. The new program also has higher penalties for some taxpayers than the 2011 program, which was originally set to expire last September.
The IRS said it has reopened the OVDP after seeing continued strong interest from both taxpayers and tax practitioners in the earlier programs. One reason for that strong interest has been the IRS’s ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion. They recently charged a trio of Swiss bankers with conspiring with U.S. taxpayers to hide more than $1.2 billion in assets from the IRS
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