offshore voluntary disclosure lawyers Minneapolis

August 24 OVDP Deadline | OVDP Tax Lawyer & Attorney

/in , /by

The fact that the IRS Offshore Voluntary Disclosure Program (“OVDP”) closes on September 28, 2018, obscured another important deadline that is much closer – the August 24 OVDP Deadline to submit the Preclearance Request.

August 24 OVDP Deadline: What is a Preclearance Request?

The Preclearance Request is basically a pre-application process to make sure that a taxpayer is eligible to apply for the OVDP. It is filed with the IRS Criminal Investigation Unit (“IRS-CI”), which will check for any outstanding investigations or examinations concerning the taxpayer.

August 24 OVDP Deadline: Is the Preclearance Request Required?

The short answer is “no”. I have seen a fair number of Internet blogs that mislead the taxpayers into believing that to the contrary, but this is simply false. A person can skip the Preclearance Request and apply directly to be accepted into the OVDP.

Nevertheless, even though the Preclearance Request is not an absolute requirement, it may be prudent to go through this process in some cases. It will be up to your international tax attorney to determine whether this is necessary.

What is the August 24 OVDP Deadline?

According to FAQ #11 published for the Closure of the OVDP, August 24, 2018 is the last day that a taxpayer will be able to submit his Preclearance (OVDP FAQ 23) Request to the IRS.

It should be remembered that the response to a Preclearance request may take 30 days or more (especially with the current rush to enter OVDP prior to its closure). In fact, the response to a Preclearance request may even come into conflict with the OVDP closure deadline. In such cases, it would be prudent to timely submit by September 28, 2018, the OVDP application letter required by OVDP FAQ #24.

Contact Sherayzen Law Office for Help With Your OVDP Application

If you have undisclosed offshore accounts and you wish to enter the OVDP, contact Sherayzen Law Office for professional help.

Sherayzen Law Office has successfully helped its clients around the globe with every type of an offshore voluntary disclosure, including 2009 OVDP, 2011 OVDI, 2012 OVDP and 2014 OVDP. We can help You!

Time is of the essence, because the current 2014 OVDP will close on September 28, 2018. Contact Us Today to Schedule Your Confidential Consultation!

Understand How IRS Amnesty Works Before Entering 2014 OVDP

/in , /by

Less than two months are left before the 2014 IRS Offshore Voluntary Disclosure Program (“2014 OVDP”) closed on September 28, 2018. 2014 OVDP may offer great benefits to taxpayers with undisclosed foreign accounts, such as the possibility of avoiding criminal penalties and greatly reducing FBAR civil penalties. Yet, entering 2014 OVDP also implies a great variety of obligations and complications that many taxpayers will find overly invasive and burdensome. Moreover, non-willful taxpayers may resent not only the amount of paperwork, but also the 27.5% to 50% OVDP Miscellaneous Offshore Penalty.

Furthermore, 2014 OVDP has its own eligibility requirements which may simply prevent a taxpayer from being able to participate in the program. Unfortunately, the taxpayer may only find out about it after he submits his OVDP application, thereby exposing himself to potential IRS investigation and penalties.

In sum, entering 2014 OVDP is an important and highly complex decision that requires a detailed evaluation of the taxpayers’ facts. 2014 OVDP is not the best solution for everyone, but it may be a critical opportunity to settle past tax noncompliance for some taxpayers (especially taxpayers whose noncompliance is likely to be considered “willful” by the IRS) – an opportunity that should not be wasted.

Such legal analysis should only be done by a skilled international tax attorney who specializes in the area of offshore voluntary disclosures. The stakes are simply too high to entrust a matter of such importance to anyone else.

Experienced International Tax Attorney Sherayzen Can Help You With Your Offshore Voluntary Disclosure

Mr. Eugene Sherayzen is an international tax attorney who specializes in offshore voluntary disclosures. In fact, this speciality occupies more than 80% of his entire practice. Mr. Sherayzen has helped his clients with respect to every major IRS voluntary disclosure program, including 2009 OVDP, 2011 OVDI, 2012 OVDP, 2014 OVDP, Streamlined Domestic Offshore Procedures, Streamlined Foreign Offshore Procedures, Delinquent FBAR Submission Procedures and Delinquent International Information Return Submission Procedures.

Additionally, Mr. Sherayzen has conducted a great number of statutory voluntary disclosures based on Reasonable Cause exception or so called “Noisy Disclosures” (they were very popular prior to 2009 as well as between 2009 OVDP and the creation of the Streamlined Filing Compliance Procedures).

Furthermore, Mr. Sherayzen represented his clients during the IRS audits of offshore voluntary disclosures, has extensive experience with IRS appeals and federal court litigation.

Contact Attorney Sherayzen Before Entering 2014 OVDP

Such an extensive work with offshore voluntary disclosures makes Mr. Sherayzen one of the most experienced offshore voluntary disclosure lawyers whose opinion should be obtained before entering 2014 OVDP (now closed).

Contact Mr. Sherayzen Today to Schedule Your Confidential Consultation!

IRS OVDP to End on September 28, 2018 | US OVDP Tax Law Firm

/in , /by

On March 13, 2018, the IRS announced that it will be closing its flagship 2014 Offshore Voluntary Disclosure (“OVDP”) program on September 28, 2018. The closure of the IRS OVDP was already predicted by Sherayzen Law Office last year. Let’s analyze further this important development.

Historical Overview of the IRS OVDP

I already provided a profound historical overview of the IRS OVDP in a previous article. Here, I would like to state a brief summary of this history.

The 2009 Offshore Voluntary Disclosure Program (“2009 OVDP”) was considered to be the first modern offshore voluntary disclosure program created by the IRS. There were voluntary disclosure initiatives in the earlier years (most notably 2004), but they lacked the sophistication, publicity and enforcement that characterized the post-UBS case IRS OVDPs.

The 2009 OVDP ended in October of that year, but its favorable results laid the foundation for the enormously successful 2011 Offshore Voluntary Disclosure Initiative (“2011 OVDI”). In fact, the 2011 OVDI turned out be such a hit that, after it ended, the IRS almost immediately instituted the “permanent” 2012 OVDP with many terms fairly similar to 2011 OVDI.

In 2014, the 2012 OVDP underwent a profound change with the creation of the Streamlined Domestic Offshore Procedures (“SDOP”) and the Streamlined Foreign Offshore Procedures (“SFOP”) as well as the split off of the old FAQ 17 and FAQ 18 into new Delinquent FBAR Submission Procedures and Delinquent International Information Returns Submission Procedures respectively. The changes to 2012 OVDP were so dramatic that the IRS and the practitioners treated the remaining part of the IRS OVDP as the 2014 OVDP.

Popularity of the IRS OVDP Changed Over Time

Since the introduction of the 2009 OVDP, more than 56,000 taxpayers participated in some version of the IRS OVDPs. Altogether, the IRS stated that “those taxpayers paid a total of $11.1 billion in back taxes, interest and penalties”.

The popularity of the IRS OVDP, however, changed over time. It really peaked with the 2011 OVDI – about 18,000 taxpayers participated in this program. The numbers have declined ever since; the decline greatly accelerated with the 2014 introduction of SDOP and SFOP. In fact, the IRS stated that only 600 disclosures were made through the IRS OVDP in the entire year 2017.

IRS OVDP: Its Importance Today and Who Will Be Affected Most by Its Closure

Today, the IRS OVDP remains the main voluntary disclosure option for US taxpayers who willfully failed to comply with their US international tax obligations. In fact, this is the best option available to these willful taxpayers. The IRS-Criminal Investigation Voluntary Disclosure Program (CI-VDP) does not offer any of the assurances on the penalty limitations that the IRS OVDP offers today.

It is important to point out, however, that the IRS OVDP can be a desirable voluntary disclosure option not only to willful taxpayers, but also to taxpayers who were non-willful in their inability to comply with the complex US international tax laws.

There are at least two categories of these non-willful taxpayers who will be affected by the impending closure of the IRS OVDP. First, the taxpayers who were non-willful, but lack sufficient proof to establish their non-willfulness in the SDOP or SFOP. In such cases, IRS OVDP offered a prudent, even if more expensive way to deal with prior tax noncompliance.

Second, due to the fact that the IRS OVDP does not impose penalties on unreported foreign assets that were not related to income tax noncompliance, some non-willful taxpayers may find it more economically beneficial to go through the IRS OVDP rather than SDOP.

Finally, it should be remembered that the IRS OVDP is the only offshore voluntary disclosure option (besides CI-VDP) that offers a Closing Agreement – i.e. a nearly guaranteed assurance that there will not be an IRS audit of prior years after the voluntary disclosure is completed, absent fraud and/or material mis-statements of fact.

Why Did the IRS Decide to End IRS OVDP?

The reasons that IRS listed today for the closure of the IRS OVDP are practically the same as what I stated in my article last year, when I predicted the likely closure of the IRS OVDP.

First, the IRS stated that the “end of the current OVDP also reflects advances in third-party reporting and increased awareness of U.S. taxpayers of their offshore tax and reporting obligations.” In other words, as I have previously wrote, the existing voluntary disclosure options are rapidly losing value as a source of new information regarding offshore noncompliance with US taxes. Third-party reporting has overtaken the OVDP in this respect due to the huge and continuously expanding network (especially the FATCA network) of automatic information exchange between the IRS and foreign financial institutions.

Second, as I warned in November of 2017, there has been a systemic change to a different model of tax administration. The IRS noted that “it will continue to use tools besides voluntary disclosure to combat offshore tax avoidance, including taxpayer education, Whistleblower leads, civil examination and criminal prosecution.”

This means that the IRS is shifting away from processing broad voluntary disclosure programs while it is embracing the model of focused enforcement. This is precisely why the IRS created the issued-based LB&I Compliance Campaigns. Hence, we now entered into a phase where various enforcement channels will dominate the IRS efforts to implement US international tax laws.

Do US Taxpayers Still Have Time to do a Voluntary Disclosure Through IRS OVDP?

Yes, the taxpayers who wish to utilize the IRS OVDP option will still be able to do it through September 28, 2018.

Contact Sherayzen Law Office if You Wish to Explore Your Voluntary Disclosure Options, Including IRS OVDP

If you a US taxpayer who has undisclosed foreign assets and foreign income, you should contact Sherayzen Law Office for professional help. Our highly experienced international tax law firm has helped hundreds of US taxpayers to successfully bring their US tax affairs into full compliance with US tax laws.

You will be working directly with an international tax lawyer and owner of Sherayzen Law Office, Mr. Eugene Sherayzen. He will thoroughly analyze the facts of your case, determine your US tax compliance requirements with respect to unreported foreign assets and foreign income, estimate your penalty exposure, and determine the available voluntary disclosure options.

Once a voluntary disclosure option is chosen, the highly professional team of Sherayzen Law Office will work with you and prepare all of the necessary tax forms and legal documents. We will guide you throughout the entire process, including IRS representation in case of an IRS challenge of your voluntary disclosure or an IRS audit.

We have helped taxpayers with assets from close to 70 countries around the world and We Can Help You! Contact Us Today to Schedule Your Confidential Consultation!

Abandoned OVDP Preclearance Requests Are Targeted by IRS

/0 Comments/in , /by

Since January 31, 2017, all of the denied and abandoned OVDP Preclearance requests have become the target of a special IRS compliance campaign. Let’s analyze in more detail this important development and attempt to predict what may be its main consequences for noncompliant or formerly noncompliant US taxpayers.

Denied and Abandoned OVDP Preclearance Requests: OVDP Background

IRS Offshore Voluntary Disclosure Program (“OVDP” now closed, is a special program developed by the IRS to allow US taxpayers to resolve their past tax noncompliance concerning unreported foreign assets and foreign income. Under the OVDP, US taxpayers have to file delinquent FBARs and other information returns as well as amended tax returns; additionally, the taxpayers are required to pay additional tax due with interest and penalties.

In return, the IRS promises that participation in the OVDP would result in no criminal prosecution for past noncompliance. Furthermore, OVDP offers a clear and limited civil penalty exposure in the form of the Miscellaneous Offshore Penalty, which replaces all other civil penalty systems, including the draconian FBAR penalties.

What Are These Denied and Abandoned OVDP Preclearance Requests?

In order to participate in the OVDP, US taxpayers have to file a Preclearance Request with the IRS-CI (Criminal Investigation). The IRS-CI determines whether applicants are eligible to participate in the OVDP; the taxpayers who fail to meet the eligibility criteria are rejected without the possibility of further participation in the OVDP.

Additionally, especially after the Streamlined Compliance Procedures were instituted, there were a lot of taxpayers who submitted their Preclearance Requests and even certain additional information, but ultimately decided not to participate in the OVDP and/or withdrew from the OVDP. These are abandoned OVDP Preclearance Requests.

Denied and Abandoned OVDP Preclearance Requests: June of 2016 TIGTA Report

Despite the fact that the IRS was already aware of prior noncompliance of the taxpayers who submitted these denied or abandoned OVDP Preclearance Requests, it failed to do any follow-up in many of these cases. In June of 2016, TIGTA issued a report on the IRS management of OVDP. Among other matters, TIGTA recommended that the IRS review all Denied or Abandoned OVDP Preclearance Requests.

LB&I Campaign on Denied and Abandoned OVDP Preclearance Requests

Partially in response to the 2016 TIGTA report, the IRS LB&I announced an unprecedented compliance campaign on Denied and Abandoned Preclearance Requests in January of 2017. The campaign specifically targets taxpayers who were denied the participation in the OVDP or who voluntarily abandoned their Preclearance requests.

On October 26, 2017, an IRS official stated that the Denied and Abandoned OVDP Preclearance Requests Campaign is focusing on approximately 6,000 US taxpayers. It appears that the exact treatment stream will be decided on a case-by-case basis, but the IRS is hoping to review (at least at some level) this entire category of taxpayers. In other words, virtually every one of these taxpayers should expect some sort of communication from the IRS, including, potentially (and maybe even likely) full IRS audit of their tax returns and FBARs.

What Does the LB&I Campaign on Denied and Abandoned OVDP Preclearance Requests Mean for US Taxpayers

US taxpayers who abandoned their OVDP Preclearance Requests or whose requests were denied by the IRS-CI should prepare as soon as possible a viable strategy on how to deal with respect to the potential IRS audit. Right now, they are at an extremely high risk of detection and possible imposition of the IRS civil and criminal penalties.

The options are various and highly depend on the individual fact pattern of a taxpayer. In particular, a taxpayer’s legal position will depend on whether the taxpayer’s prior noncompliance was willful or non-willful and whether he abandoned his OVDP Preclearance Request or such a request was denied.

This entire analysis of a taxpayer’s legal position and available strategies for dealing with a possible IRS audit should be done by an experienced international tax lawyer who specializes in the area of offshore voluntary disclosures.

Contact Sherayzen Law Office for Professional Help With the LB&I Campaign on Denied and Abandoned OVDP Preclearance Requests

If your OVDP Preclearance Request was denied by the IRS or abandoned by you, you should contact Sherayzen Law Office for professional help as soon as possible. Our legal team is highly experienced in the area of international tax law and, specifically, offshore voluntary disclosures. In fact, we have helped hundred of US taxpayers around the globe to bring their US tax affairs into full compliance with US tax laws. We Can Help You!

Contact Us Today to Schedule Your Confidential Consultation!

OVDP & Streamlined Disclosure May Terminate Soon | Foreign Accounts Lawyer

/0 Comments/in , /by

On November 15, 2017, the IRS sent yet another signal that certain offshore voluntary disclosure options, particularly the OVDP & Streamlined Disclosure options, will be significantly modified or even terminated as the IRS proceeds with the LB&I Compliance Campaigns. This means that US taxpayers with undisclosed foreign accounts need to hurry up if they wish to proceed with their offshore voluntary disclosure utilizing the OVDP or the Streamlined Compliance Procedures.

OVDP & Streamlined Disclosure Termination: What Did the IRS Say?

The latest signal on the termination of the OVDP & Streamlined Disclosure options came from Mr. John Cardon (director of the withholding and international compliance area within IRS LB&I) and Mr. Daniel Price, an attorney with the IRS Office of Chief Counsel, Small Business/Self-Employed Division in Austin, Texas.

Both IRS officials emphasized that the current Offshore Voluntary Disclosure Program and the Streamlined Filing Procedures are likely to terminate soon. Mr. Price emphasized the fact that these voluntary disclosure options were always intended as special offers that were bound to end at some point.

The possibility that the IRS wishes to terminate the Streamlined Disclosure options in addition to OVDP is somewhat sudden and premature. The IRS already stated in the past that it is no longer satisfied with the OVDP, but it never complained about the Streamlined Compliance Procedures (which have been highly successful with over 18,000 disclosures just in the last year). It is also not clear whether the IRS wishes to completely terminate all OVDP and Streamlined Disclosure options or whether the Streamlined Filing Procedures will survive in one form or another.

Why the IRS Wishes to End OVDP & Streamlined Disclosure Options

There is more than one reason behind the current IRS drive to end or significantly modify the existing voluntary disclosure options. Let’s focus on the two most important of them.

First, the existing voluntary disclosure options are rapidly losing value as a source of new information regarding offshore noncompliance with US taxes. FATCA has created an enormous and continuously expanding network of automatic information exchange between the IRS and foreign financial institutions. Moreover, other automatic information exchanges mechanisms have successfully filled most of the gaps left by FATCA.

In other words, now that offshore tax compliance and automatic international information exchanges have become a worldwide norm, the IRS does not need voluntary disclosures to obtain new information about offshore tax noncompliance.

Second, there has been a systemic change to a different model of tax administration. As the IRS officials emphasized on November 15, 2017, the IRS is shifting away from processing broad voluntary disclosure programs while it is embracing the model of focused enforcement. This is precisely why the IRS created the LB&I Compliance Campaigns – to concentrate its limited resources on tax enforcement where it is most needed rather than engage in broad efforts with respect to voluntary correction of past errors. Hence, in an environment where enforcement dominates over voluntary disclosures, the utility of the IRS voluntary disclosure options becomes more and more limited.

OVDP & Streamlined Disclosure Termination: When Will the IRS Announce the Termination of the Current OVDP & Streamlined Disclosure Programs?

It appears that the IRS will make the appropriate announcement for the termination of the voluntary disclosures prior to the end of January of 2018.

Will the Termination of Current OVDP & Streamlined Disclosure Programs Happen Immediately or Sometime After the Announcement?

It appears that, even after its announcement of the termination of the OVDP & Streamlined Disclosure options, the IRS will provide some time for the taxpayers to finalize their on-going disclosures. Mr. Cordone even stated that the voluntary disclosure programs’ termination date could be as far away as one year from the date of the IRS announcement of such a termination.

Will the End of OVDP & Streamlined Disclosure Programs Also Mark the End of IRS Voluntary Disclosures Per Se?

While the recent IRS moves are of great concern, they should not be taken as the end of the IRS voluntary disclosures per se with no options available to remedy one’s past tax noncompliance with respect to offshore accounts. Rather, I expect that the IRS voluntary disclosures will simply shift to different options. It is beyond the scope of this article to discuss these potential voluntary disclosure options, but it is reasonable to assume we will find ourselves in situation somewhat reminiscent of the period of time between the end of 2011 OVDI and the beginning of 2012 OVDP.

If, however, a taxpayer wishes to take advantage of the existing voluntary disclosure options, the taxpayer should contact Sherayzen Law Office as soon as possible to make sure that the voluntary disclosure can be completed before the IRS closes OVDP & Streamlined Disclosure Program.

Contact Sherayzen Law Office for Professional Help with Your Offshore Voluntary Disclosure, including the OVDP & Streamlined Disclosure Options

If you have undisclosed foreign accounts or any other foreign assets, you should contact Sherayzen Law Office for professional help as soon as possible. Our international tax firm is highly experienced in successful completion of offshore voluntary disclosures for clients with foreign assets in close to 70 countries. We can help You!

Contact Us Today to Schedule Your Confidential Consultation!