ARTICLE · 26 MARCH 2018

U.S. Internal Revenue Service To End Offshore Voluntary Disclosure Program

MNP LLP

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On March 13, 2018 the U.S. Internal Revenue Service (IRS) announced it will be shutting down the Offshore Voluntary Disclosure Program (OVDP) in September.

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Kevyn Nightingale

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On March 13, 2018 the U.S. Internal Revenue Service (IRS) announced it will be shutting down the Offshore Voluntary Disclosure Program (OVDP) in September.

The program was launched in 2009 by the IRS. The OVDP was designed for individual U.S. taxpayers who had assets offshore, knew they should have been reporting them and the income they generate and failed to do so. In other words, it was for the people hiding money and income abroad.

Taxpayers using the OVDP pay a penalty of 27.5 percent or 50 percent of the assets held abroad, in addition to tax, interest and potentially a 20 percent accuracy related penalty on unreported income. While these penalties are significant, they can often be smaller than the regular penalties. More importantly, filing under the OVDP precludes criminal prosecution.

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