2018 marks the last year for the Internal Revenue Service’s Offshore Voluntary Disclosure Program. The scheme, put in place in its modern form in 2014, was designed to give US persons with offshore assets a chance to disclose those assets for evaluation in the taxes they owe America.
In the press announcement, acting IRS commissioner David Kautter said the Offshore Voluntary Disclosure Program has reached its end because the timing is right. "Taxpayers have had several years to come into compliance with U.S. tax laws under this program," said David Kautter. "All along, we have been clear that we would close the program at the appropriate time, and we have reached that point. Those who still wish to come forward have time to do so."
In its current iteration, the Offshore Voluntary Disclosure Program allows US persons to disclose interests or authority over financial accounts that exceed $10,000 so they can surrender those assets to the IRS for tax evaluation. These are commonly filed under a Report of Foreign Bank and Financial Accounts (usually referred to as “FBAR”). Failure to do so can result in fines and even criminal charges, despite the fact that many people do not know that these assets need to be disclosed.
The Offshore Voluntary Disclosure Program reached its height of popularity in 2015 when more than a million of such disclosures were filed. This has since dropped dramatically as new tax laws have taken effect. That said, the disclosure of these assets is incredibly important for staying compliant with the tax expectations of the IRS. Foreign income and assets are incredibly complicated, and they are also paramount in terms of remaining compliant with current taxation. Ignorance of what needs to be filed will no longer be a viable excuse for not disclosing and possibly paying money as a result. If you have foreign investments, assets, or controls, you will need to understand which fall under the purview of taxes and, in some cases, pay money owed on those investments.
If you have foreign assets that fall under the Offshore Voluntary Disclosure Program ( www.EsquireGroup.com/About ), the best thing you can do is work with an experienced accounting firm that specializes in foreign investments. With the right accounting team behind you, you can figure out which information is pertinent and ensure that you are paying what is owed without paying more. It is the best way to ensure that your assets are as productive as possible without running the risk of being caught for not paying what is due.