“Decisions regarding opting out should be carefully considered depending upon the taxpayers responses to each of the foregoing questions.”
For more than a year, numerous taxpayers with previously undisclosed interests in foreign financial accounts and assets have been seeking participation in the current IRS offshore voluntary disclosure program (the OVDP) which began in 2012, modeled after similar programs in 2009 and 2011.
Taxpayers participating in the OVDP generally agree to file amended returns and file FINCEN Form 114 (formerly Form TD 90-22.1, Report of Foreign Bank and Financial Accounts), FBARs, for eight tax years, pay the appropriate taxes and interest together with a 20% accuracy related penalty and an “FBAR-related” penalty (in lieu of all other potentially applicable penalties associated with a foreign financial account or entity) of 27.5% of the highest account value that existed at any time during the prior eight tax years. The OVDP does not have a stated expiration date but can be terminated by the IRS at any time as to specific classes of…
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