IRS Modifies Offshore Voluntary Disclosure Program And Streamlined Filing Compliance Procedures

On June 18, 2014, the IRS unveiled significant changes to both Offshore Voluntary Disclosure Program (OVDP) and Streamlined Filing Compliance Procedures (SFCP). The changes both relax the penalty structure for non-willful behavior but increase it soon for account holders at certain banks. The expansion and modification of the programs are effective as of July 1, 2014 (with some exceptions).

Expansion of the Streamlined Filing Compliance Procedures

The IRS has expanded, albeit with important conditions, the SFCP to cover all U.S. taxpayers who are currently not under audit or criminal investigation by the IRS. The highlighted changes to SFCP are:

• The original SFCP applied to non-filers only; amended returns will now be accepted. Eligibility will no longer be denied based on the amount of U.S. tax involved, the country in which an account is held, or the presence of more complicated business and personal structures.