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On September 28, 2018 the IRS ended its Offshore Voluntary Disclosure Program, henceforth referred to as OVDP. The OVDP was a program designed for taxpayers that may have exposure to criminal or substantial civil penalties due to choosing not to report foreign financial assets and pay the appropriate taxes in respect to those assets. The OVDP was used to provide taxpayers with protection from criminal liability in relation to the offshore assets and also a means for them to resolve their tax obligations in respect to those assets.
This is not the first “voluntary disclosure” program put into place by the IRS. The first OVDP was initiated in 2009, and the IRS has launched further voluntary disclosure programs since, leading to the current 2014 OVDP. This iteration of the OVDP is being closed due to a declining number of disclosures in 2017.
The closure of the OVDP does not mean that taxpayers with unreported offshore assets will have no safe way to responsibly manage their tax liability. There are still four programs in use by the IRS that allow for taxpayers to disclose sensitive assets. There is the Streamlined Voluntary Disclosure Submission Process, the Criminal Investigation Voluntary Disclosure Program, Procedures for Submitting Delinquent Foreign Bank Account Reports (FBAR), and the Procedures for Submitting Delinquent International Information Returns. Taxpayers should speak with an experienced OVDP attorney prior to making any decisions, as some of these programs involve very strict eligibility standards.