You made an Offshore Voluntary Disclosure, now what?
In July 2019, the Internal Revenue Service (“IRS”) Large Business and International Division announced the next steps after taxpayers made a voluntary disclosure regarding unreported bank accounts or foreign assets. When taxpayers make a voluntary disclosure, each taxpayer essentially promises to stay compliant with their foreign reporting of foreign assets. However, the IRS has determined that many taxpayers are not holding up their end of the bargain. The IRS has concluded that although you made a disclosure, if it was false or in any way not one-hundred percent truthful or you have not continued with foreign reporting compliance, that your disclosure will likely be audited or recent years will begin to be audited, if not already.
There are many reasons why the IRS has decided to move forward with auditing offshore voluntary disclosures and taxpayers who entered the Offshore Voluntary Disclosure Program who failed to stay current with their foreign reporting. However, one of the big reasons why is that since 2013 or so the IRS has sent out thousands of “John Doe” summonses to thousands of foreign bank intuitions and has received hundreds of thousands of documents with United States taxpayers’ foreign account information. Ultimately, the IRS will have access to all United States taxpayers that have financial accounts in foreign banks.
What does this mean for you?
Overall, this means the world that was once so big is much smaller.
If you by any chance did not make a truthful disclosure to the IRS or have not kept up with staying compliant with your foreign reporting or have received an examination letter from the IRS, contact Moskowitz LLP at (415) 394-7200. Moskowitz LLP has been working with international tax filing and reporting compliance since 2009 when the OVDP was announced.
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