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IRS International Tax Campaigns | International Tax Attorney Houston

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Five of the thirteen new IRS Campaigns directly target US international tax noncompliance. In this essay, I would like to provide a brief overview of these five IRS International Tax Campaigns. In the future articles, I will explain each of these campaigns in more detail.

IRS International Tax Campaigns: Background Information

After multiple years of preparation and reorganization, the IRS Large Business and International Division announced a new way to enforce US corporate and international tax laws – issue-focused IRS campaigns. An IRS campaign is basically an approach to tax enforcement which allows the IRS to allocate its scarce resources to a specific issue that the IRS believes to be a major noncompliance concern. This is very different from the previous IRS approaches which focused more on specific types of taxpayers.

On January 31, 2017, the IRS outlined the first thirteen campaigns and claimed that many more campaigns are in the process of being developed and finalized. Five of the first thirteen campaigns focus on international tax compliance issues.

IRS International Tax Campaigns: General Description

These five IRS International Tax Campaigns are: Offshore Voluntary Disclosure Program (“OVDP”) (closed 2018). Declines-Withdrawals Campaign, Repatriation Campaign, Form 1120-F Non-Filer Campaign, Inbound Distributor Campaign and Related Party Transactions Campaign.

The international focus of the OVDP, Repatriation, Form 1120-F and Inbound Distribution Campaigns is fairly obvious. The Related-Party Transactions is listed among the IRS International Tax Campaigns because of the IRS focus on the transfer of funds from a controlled foreign corporation to its related pass-through entities (US or foreign) or shareholders.

IRS International Tax Campaigns: What Taxpayers are at Risk

Among the IRS International Tax Campaigns, the OVDP Declines-Withdrawal Campaign and Form 1120-F Non-Filer Campaign can apply to small, mid-market and high net-worth taxpayers. It appears that the Inbound Distributor Campaign is likely to apply to any mid-market to large taxpayers. The rest of the IRS International Tax Campaigns, the Repatriation Campaign and the Related Party Transactions Campaign, specifically identify “mid-market taxpayers” as a targeted group. It should be stated, however, that the Repatriation Campaign will also indiscriminately target failures to state taxable transactions on US tax returns.

From the description above, it is obvious that the IRS is increasing its focus on mid-market taxpayers. Who is considered to be a “mid-market” taxpayer? The IRS defined this category during its first webinar on March 7, 2017 as taxpayers with assets between $10 million and $250 million. If you or your company fall within this category, you are at a high risk of IRS examination.

What Should Taxpayers Exposed to the IRS International Tax Campaigns Do?

If you are taxpayer with tax issues identified in the IRS International Tax Campaigns, you should contact Sherayzen Law Office as soon as possible. Our team of tax professionals, headed by an international tax attorney, Mr. Eugene Sherayzen, will: thoroughly analyze your case to determine if you are currently in compliance with US tax laws, determine the options for proceeding forward with bringing your tax affairs into full compliance and preparing for an issue-based examination, and implement the preferred option (including the preparation of all legal documents and tax forms).

Contact Us Today to Schedule Your Confidential Consultation!

Houston OVDP Tax Attorney

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Who is considered to be Houston OVDP tax attorney? Initially, most taxpayers would say that this is a strange question to ask, because the answer is very simple: Houston OVDP tax attorney is an attorney who resides in Houston and specializes in helping U.S. taxpayers disclose their undeclared foreign accounts.

This answer, however, is anachronistic and erroneous, because it does not take into account two important considerations. First, there is no “OVDP” law; OVDP is the IRS Offshore Voluntary Disclosure Program which is administered by the IRS for the purpose of allowing U.S. taxpayers with undeclared offshore assets and offshore income to voluntarily disclose these assets under a mitigated penalty. This means that, in reality, the OVDP “law” is simply a sub-area of international tax law and all “OVPD tax attorneys” are simply international tax attorneys who specialize in IRS OVDPs and are also knowledgeable in other relevant aspects of U.S. international tax law.

Nevertheless, the term Houston OVDP tax attorney is commonly used to describe an international tax attorney who helps his clients with the declaration of undisclosed foreign assets and foreign income.

The second and most important correction is that Houston OVDP tax attorney does not mean that the tax attorney should reside in Houston. OVDP is a federal tax program and can be practiced by an international tax attorney who is licensed in any of the 50 states of the United States. Hence, an international tax attorney who does offshore voluntary disclosures and helps his clients who reside in Houston, Texas, is automatically a Houston OVDP tax attorney.

This means that Houston OVDP tax attorney can actually reside in Minneapolis or any other city. Mr. Sherayzen of Sherayzen Law Office is an example of such a Houston OVDP tax attorney – he resides in Minneapolis but helps his clients throughout the world, including Houston, Texas.

We can now go back and answer my original question: who is considered to be Houston OVDP tax attorney? The answer is as follows: a Houston OVDP tax attorney is an international tax attorney who is licensed to practice in any of the 50 states of the United States, resides anywhere in the United States (Minneapolis, for example) or any other country, and helps his clients in Houston with OVDP disclosures.

Contact Sherayzen Law Office If You Are Looking for A Houston OVDP Tax Attorney

If you are looking for Houston OVDP tax attorney, you should contact Sherayzen Law Office, Ltd., an international tax law firm that specializes in offshore voluntary disclosures and helps its clients in Houston, Texas.

Our professional legal team is highly experienced in the OVDP disclosures; we have helped clients with every major IRS offshore voluntary disclosure program (2009 OVDP, 2011 OVDI, 2012 OVDP and the 2014 OVDP now closed), both types of Streamlined Disclosures (Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures), Delinquent International Information Return Submission Procedures and Delinquent FBAR Submission Procedures.

Contact Us Today to Schedule Your Confidential Consultation!

IRS Declares New 2012 Offshore Voluntary Disclosure Program

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On January 9, 2012, the Internal Revenue Service announced that it opens another offshore voluntary disclosure program – 2012 Offshore Voluntary Disclosure Program or 2012 OVDP – to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs.

The IRS opened the 2012 OVDP following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced. Program was closed in 2018.

“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have billions of dollars in hand from our previous efforts, and we have more people wanting to come in and get right with the government. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system.”

The 2012 OVDP is similar to the 2011 OVDI program in many ways, but with a few key differences. First, unlike the last year, there is no set deadline for people to apply. Second, while the 2012 OVDP penalty structure is mostly similar to the OVDI program, the taxpayers in the highest penalty category will suffer from a hike in the penalty rate – the new penalty framework requires individuals to pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. That is up from 25 percent in the 2011 program. Some taxpayers will be eligible for 5 or 12.5 percent penalties; these remain the same in the new program as in 2011. Third, participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties. Fourth, as under the prior programs, taxpayers who feel that the penalty is disproportionate may opt instead to be examined.

The important details of the 2012 OVDP are still going to be announced by the IRS later.  It is important to emphasize, however, that the terms of the 2012 OVDP could change at any time going forward. For example, the IRS may increase penalties in the 2012 OVDP for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point.

The IRS also stated that it is currently developing procedures by which dual citizen taxpayers, who may be delinquent in filing but owe no U.S. tax, may come into compliance with U.S. tax law.

“As we’ve said all along, people need to come in and get right with us before we find you,” Shulman said. “We are following more leads and the risk for people who do not come in continues to increase.”

This offshore effort comes as Shulman also announced today the IRS has collected $3.4 billion so far from people who participated in the 2009 offshore program, reflecting closures of about 95 percent of the cases from the 2009 program. On top of that, the IRS has collected an additional $1 billion from up front payments required under the 2011 program. That number will grow as the IRS processes the 2011 cases.

In all, the IRS has seen 33,000 voluntary disclosures from the 2009 and 2011 offshore initiatives. Since the 2011 program closed last September, hundreds of taxpayers have come forward to make voluntary disclosures. Those who have come in since the 2011 program closed last year will be able to be treated under the provisions of the new 2012 OVDP program.

Contact Sherayzen Law Office for Legal Help With Your Voluntary Disclosure

If you are currently not in compliance with U.S. tax laws, contact Sherayzen Law Office for legal help. Our experienced international tax firm will explore all of the available options, advise you on the best course of action, draft all of the required documentation, provide IRS representation, and conduct the necessary disclosure to bring your affairs tax affairs into full compliance with U.S. tax system.