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August 24 OVDP Deadline | OVDP Tax Lawyer & Attorney

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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!

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!

Offshore Voluntary Disclosure of Swiss Accounts and the Program for Banks

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Since September, an increasing number of my clients come to me with respect to the offshore voluntary disclosure of Swiss accounts. No doubt that the increase in the offshore voluntary disclosure of Swiss accounts comes from The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”) initiated by the U.S. Department of Justice (“DOJ”) on August 29, 2013. In this article, I will try to trace the precise influence of the Program on the offshore voluntary disclosure of Swiss accounts.

The Program

At the end of August of 2013, the DOJ, in cooperation with the Swiss government, instituted the Program. What is the Program? I describe it in detail in this article; for the purpose of the present writing, it is sufficient to state that the Program is essentially a voluntary disclosure program for Swiss Banks, not that dissimilar from the OVDP (the Offshore Voluntary Disclosure Program) now closed.

Essentially, in return for turning over very detailed information about their cross-border operations and U.S. accountholders with accounts over $50,000 (going back to August 1, 2008), the banks receive either a Non-Prosecution Letter or a Non-Target Letter which basically promises that the U.S. government is not going to criminally prosecute or target the participating banks. As in the OVDP, the Program excludes banks currently under the DOJ investigation from participating in the Program. Another similar with the OVDP feature – category 2 banks will pay a hefty penalty.

The Program Increases Pressure on the U.S. Taxpayers to Disclose

U.S. taxpayers with undisclosed bank accounts in Switzerland cannot personally participate in the Program. Nevertheless, the Program has a tremendously deep impact on these taxpayers.

First, under the Program, the Swiss banks should send out letters to all U.S. taxpayers with undisclosed accounts urging them to do the offshore voluntary disclosure of Swiss accounts. The Swiss banks are not only required to do so, but may actually benefit if the U.S. taxpayers enter the OVDP (due to potential penalty reductions).

Second, the participating Swiss banks should turn over very detailed information with respect to U.S. taxpayers and their Swiss accounts. Hence, there is a tremendously high risk of exposure for all U.S. taxpayers with undisclosed Swiss accounts. Moreover, if the IRS receives the information from the Swiss banks about a U.S. taxpayer’s accounts before such taxpayer enters the OVDP, then the IRS is likely to disqualify such U.S. taxpayer from participating in the OVDP.

Finally, because the participating Swiss banks should further disclose various information related to how they obtained business from U.S. taxpayers in the past, it is likely that the IRS will be able to identify the non-compliant accounts indirectly (i.e. even if a taxpayer is not directly identified by the participating Swiss Bank). This means that U.S. taxpayers who indirectly own undisclosed accounts in Switzerland are also at high risk of detection, investigation and, ultimately, criminal prosecution.

Offshore Voluntary Disclosure of Swiss Accounts

As the number of options narrow for U.S. taxpayers, they should seriously consider doing an offshore voluntary disclosure of Swiss accounts.

Be careful, however, not to fall into the trap of thinking that OVDP is the only way to disclosure your Swiss accounts. The exact route of Offshore Voluntary Disclosure of Swiss accounts is likely to depend on the individual circumstances of your case and other venues may be open to you, even though they are not described in the letter that you may have received from a Swiss bank. You should consult an experienced international tax attorney in this matter.

Contact Sherayzen Law Office for Professional Guidance on the Offshore Voluntary Disclosure of Swiss Accounts

If you are thinking about conducting an Offshore Voluntary Disclosure of Swiss Accounts, contact Sherayzen Law Office for professional help. Our law firm specializes in helping people like you!