IRS Targeting Post-Voluntary Disclosure Compliance With New Campaign

Recently, the IRS announced that it was targeting individual taxpayers who previously participating in its Offshore Voluntary Disclosure Program ("OVDP") to check and see if they were still in compliance with their foreign income and asset reporting obligations.

U.S. persons generally owe taxes on their worldwide income and pursuant to the Foreign Account Tax Compliance Act ("FATCA") must disclose their assets held abroad every year. Failure to either pay the appropriate amount of taxes or disclose foreign assets may subject a taxpayer to penalties and in particularly egregious cases, criminal charges.

Several years ago, the IRS started OVDP in an effort to promote compliance among U.S. taxpayers with foreign assets and income. The program was designed to allow those who faced potential criminal liability to come forward and pay all taxes due and reduced penalties in exchange for an agreement by the IRS not to pursue criminal charges.