Tuesday, January 10, 2012

Foreign Account Voluntary Disclosure Initiative

At our recent seminars I spent a considerable amount of time talking about the offshore voluntary disclosure initiatives that had expired and the extremely large penalties that can be asserted.  Commissioner Shulman stated that there would be no more disclosure initiatives available after the second one ended in 2011. 

Good News!!!!!!  Yesterday the IRS announced that it had reopened the Offshore Voluntary Disclosure Initiative.  The 2009 and 2011 programs have accounted for $4.4 billion of revenue so far.  While the reopened program will be generally the same as the 2011 program, the penalty will 27.5% of the highest amount in the accounts in the previous 8 years (this is a 10% increase from the 25% penalty that applied in the 2011 program).  In certain cases the penalty could be as low as 5% or 12.5%.

At this time the IRS has not set a date for the end of this initiative.  As always, Neil and I remain available to assist you and your clients in regards to applying for this program and receiving the relief available.

Bob Katz