We have talked with over a thousand people that have undisclosed foreign accounts and foreign income. We have learned a lot since the first Offshore Disclosure Initiative in 2009. It is our position that the IRS is the most powerful collection agency in the world. Truth, justice, liberty, limited government…well, those are all nice ideas, but the fact is that we are all supplicants of the IRS. And that includes those with unreported income and unreported FBARs, the IRS says, use the OVDP. No matter how unfair it may seem.
Not everyone understands this so we, as counselors, find ourselves in the position of having to "sell" the IRS Offshore Voluntary Disclosure Program. Not that we think the OVDP is fair or equitable, or is even constitutionally permissible. But when faced with two bad alternativesc – the OVDP or rolling the dice, OVDP comes out ahead. That's our opinion anyway. Gambling with the IRS, especially when the stakes are so high, just doesn't make sense to us. Maybe you disagree. But to help you make sense of what is the best course of action, here are the most common objections we hear.