February 8, 2011: Offshore Voluntary Disclosure Initiative
The IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative in order to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available only through Aug. 31, 2011. The OVDI is the government's effort to locate unreported overseas accounts.
The 2011 initiative has a higher penalty rate than the IRS's previous voluntary disclosure program, which ended on Oct. 15, 2009, but offers benefits to encourage taxpayers to disclose foreign accounts now rather than risk IRS detection, harsher civil penalties and possible criminal prosecution. In addition, the 2011 initiative includes new guidelines to provide fairness to people with smaller amounts of undisclosed assets or unusual situations. For example, the program offers a reduced penalty rate of 12.5% for accounts of $75,000 or less.
For details on the 2011 initiative, visit the links below: