2011 OVDI Program Q&A’s Updated by IRS; FBAR Deadline Reminder

On June 2, the IRS updated the Q&A’s describing the 2011 Offshore Voluntary Disclosure Initiative.  The initiative is discussed in more detail in our March 3rd blog post, but generally it is a program that allows taxpayers with undisclosed foreign income or assets to come into compliance for a penalty that is below that which would apply outside the program (in most cases).

The updated Q&A’s (1) provide for a 90-day extension period for taxpayers wishing to comply that are unable to make the August 31 deadline, so long as the taxpayer makes a good faith attempt to comply and can explain which items are missing and why; (2) compare in detailed explanations, the penalties that would potentially apply to taxpayers participating in the initiative versus with those penalties that would potentially apply to taxpayers that “opt-out” of the initiative; and (3) provide an additional reduced penalty for foreign residents with very little U.S. source income so long as such foreign residents have been reporting and paying tax in their jurisdiction of residence.

Remember 2010 FBAR (Form TD F 90-22.1) filings are due June 30th, and the deadline to participate in the 2011 OVDI is August 31.

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Roger Royse
rroyse@rroyselaw.com

Roger Royse, the founder of the Royse Law Firm, works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. Roger regularly advises on complex tax structuring, high stakes business negotiations and large international financial transactions. Practicing business and tax law since 1984, Roger’s background includes work with prominent San Francisco Bay area law firms, as well as Milbank, Tweed, Hadley and McCloy in New York City.
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