Powerful legal options are available to U.S. citizens, residents, and others facing both criminal prosecution and substantial civil penalties for failure to disclose the existence of tax shelters or offshore accounts at UBS and other foreign banks.
In follow-up to its popular 2009 and 2011 Offshore Voluntary Disclosure Initiatives, the IRS announced its new Offshore Voluntary Disclosure Program (“OVDP”) in January, 2012. The OVDP offers taxpayers the ability to disclose up to eight years of unreported foreign income and assets without the risk of criminal prosecution and with substantially lower penalties imposed. Unlike the 2011 Initiative, there is currently no deadline for taxpayers wishing to apply for the OVDP. However, the IRS may change the terms of the program at any time, including increasing the penalties, limiting eligibility, or ending the program altogether.
Where a taxpayer is admitted to the OVDP and discloses hidden offshore assets, the taxpayer will be required to pay a penalty of 27.5% of the amount in the foreign bank accounts in the year with the highest aggregate account balance during the most recent eight years for which the disclosure due date has otherwise passed, which represents a slight increase from the 25% penalty imposed under the 2011 Initiative. Taxpayers in limited situations will remain eligible for reduced penalties of 12.5% and 5% under the new program. Said penalties are in addition to any back taxes and interest owed, as well as any applicable accuracy and delinquency penalties.
Individuals and entities, such as corporations, partnerships, and trusts are eligible to make disclosures under the OVDP. Participation requires the taxpayer to file all outstanding original and amended tax returns and submit full payment of taxes, interest, and accuracy and delinquency penalties, or make good faith arrangements with the IRS for the payment of such.
Preparing a voluntary disclosure package under the OVDP is a complex undertaking requiring considerable effort to prepare the disclosure package, and the right legal strategy can help protect taxpayers, their families, their assets, and their futures. Legal representation in matters of this nature is best handled by an attorney with extensive experience working with both the IRS and the Department of Justice in high stakes criminal taxation matters.
I have chosen to focus my law practice on Federal Criminal and Civil Tax Defense and White Collar Crimes. Over the last 38 years, I have earned a successful track record working with both the IRS and the Department of Justice in high stakes white collar criminal and tax matters and have argued before the United States Supreme Court as well as other federal courts throughout the country. I fight hard to enforce the rights of my clients, and I believe in the integrity of that fight.
If you have questions or concerns about the IRS OVDP, tax shelters, undisclosed accounts or assets, or other IRS issues, I invite you to contact me directly to discuss them at (212) 639-1600 or Mullin@TaxDefense.com. You will discuss your concerns with me personally—never an associate or a paralegal. In addition, you should know that your contact with me, and with my firm, is privileged under the law, regardless of whether or not you decide to retain my firm to represent you.
For answers to frequently asked questions on the OVDP, click here.