What is The Offshore Voluntary Disclosure Program And How Does it Help?

Have you ever been untruthful when it comes to your income taxes? Do you have any offshore accounts that you may have chosen to hide from the government come tax time? If so, you may be eligible to participate in the Offshore Voluntary Disclosure Program. This program is available to taxpayers who have been dishonest about their offshore accounts in the past, but have chosen to make things right rather than run the risk of getting caught by the IRS. What is the Offshore Voluntary Disclosure Program? The Offshore Voluntary Disclosure Program was designed by the IRS as a way for dishonest taxpayers to come clean regarding their previously unreported offshore accounts. The program exists to offer an alternative to these taxpayers eventually getting caught and charged by the IRS when their dishonesty is finally discovered. Taxpayers who have undisclosed foreign accounts and assets are given the choice to voluntarily report the existence of these previously hidden accounts to the IRS. By choosing to do this, the taxpayer can resolve any issues that exist within their previous income tax reports, and the taxpayer will also prove to the IRS that he or she can be trusted to complete their yearly tax declarations correctly in the future. It is important that this option is voluntary in order to prove that the taxpayer has had a change of heart before they come under official investigation. Those who have already been targeted by the IRS are not eligible to complete the Offshore Voluntary Disclosure Program, as it is only when they’ve seemingly been caught that they decided to come clean with their tax declarations. What Benefits Come Out of Participating in the Offshore Voluntary Disclosure Program? If you choose to voluntarily participate in the Offshore Voluntary Disclosure Program, you have the opportunity to file up to eight years’ worth of tax returns and Foreign Bank and Financial Accounts (FBARs). Foreign financial assets, including bank accounts, mutual funds, trust funds, and other financial interests, are all included within these FBARs. By disclosing this information to the IRS, you will avoid prosecution and limit your exposure to civil penalties. By volunteering to participate, you are assisting the IRS in resolving a number of cases without the need to conduct examinations. For this reason, the IRS ensures that the taxpayers who participate are rewarded for their honesty. Once completing the documentation necessary for your participation in the program, you will have to pay back your taxes owing, as well as any interest and penalties that have been added to your previously undeclared taxes. The Offshore Voluntary Disclosure Program will ensure that you will save yourself the additional money you would have paid in penalties if you chose to wait until the IRS discovered your undisclosed foreign accounts, and you will also avoid potential jail time. What Makes a Taxpayer Ineligible for the Program? As previously stated, the Offshore Voluntary Disclosure Program is just as it sounds – voluntary. It is a program that is designed to give dishonest taxpayers a chance to make things right. It is not intended as a way out for those who are facing the threat of persecution by the IRS as a result of a civil examination or criminal investigation. If you have waited until you are discovered to take action, it is too late to participate. It is also important that any taxpayer who chooses to participate has invested legal source funds into their previously undisclosed assets. If any of the funds or assets being disclosed are derived from criminal activity, you will also be unable to participate in the Offshore Voluntary Disclosure Program. Admitting your past mistakes now, before the IRS is forced to take action, will ensure that you avoid the money and jail time involved in an official investigation. By participating in this program, you cannot be criminally prosecuted, and any non-compliance older than eight years will be pardoned.

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