05 Jun 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.Disclaimer: This blog and website are public sources of general information concerning our firm and its lawyers, as well as the information presented. They are intended, but not promised or guaranteed, to be correct, complete, and up-to-date as of the date posted. This blog and website are not intended to be, and are not, sources of legal opinion or advice. The materials, information, and communications on this blog and website do not apply to any particular person, entity, or situation, and do not apply to you or to your specific situation. You will need to consult with an attorney and/or other appropriate professional about your specific situation. Thank you.