In Part 3 of the 2014 Offshore Voluntary Disclosure Guide, Tax Attorney Anthony E. Parent discusses the OVDP costs of complying with the various Offshore Programs, including attorney fees, along with some of the risks associated with not disclosing foreign offshore bank accounts to the IRS.
Watch here:
Here is the outline for Part 3: OVDP Costs
1. The Standard OVDP with 27.5% Offshore Penalty.
2. The reduced 12.5% penalty for accounts less than $75,000.
3. The reduced 5% penalty available in a few cases (and the reason why it isn't such a great deal).
4. The Streamlined OVDI with a 0% Offshore Penalty.
5. And the opt-out process which has a potential of a 0% Offshore Penalty.
In particular, concerning OVDP costs, the following IRS OVDP FAQs are discussed:
- OVDP FAQ 8: How does the Offshore Penalty framework work? Can you give us an example?
- OVDP FAQ 9: What years are included in the OVDP disclosure period?
- OVDP FAQ 10: What are my options if my account involves passive foreign investment company (PFIC) issues?
- OVDP FAQ 11: There actually is no FAQ 11. It has been erased from memory.
- OVDP FAQ 51: If, after making a voluntary disclosure, a taxpayer disagrees with the application of the offshore penalty, what can the taxpayer do?
- OVDP FAQ 51.1: Under what circumstances might a taxpayer consider opting out of the civil settlement structure of the OVDP?
- OVDP FAQ 51.2: Under what circumstances might opting out of the civil settlement structure of the 2011 OVDI be a disadvantage for the taxpayer?
- OVDP FAQ 51.3: If I opt out of the OVDP and undergo a regular examination, is there a chance my case could be referred back to Criminal Investigation for penalties or prosecution?
- OVDP FAQ 52: Under what circumstances would a taxpayer making a voluntary disclosure under this initiative qualify for a reduced 5 percent offshore penalty?
- OVDP FAQ 53: Under what circumstances would a taxpayer making a voluntary disclosure under this initiative qualify for a reduced 12.5% offshore penalty?
