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First in 2009, and again in 2011 and  2012, the IRS initiated the Offshore Voluntary Disclosure Program (OVDP), which is designed to encourage taxpayers with undisclosed foreign accounts to disclose all offshore accounts, bring themselves into full compliance with federal tax law, and reduce their exposure to criminal penalties that could flow from willful violation of the law. The most recent version of this program is an extension of the 2012 initiative.

In the United States, taxpayers who hold one or more financial accounts with more than $10,000 in aggregate assets overseas or who have signature authority over such an account are required to complete a Report of Foreign Bank and Financial Accounts (FBAR). The FBAR is filed to alert the Internal Revenue Service to an individual taxpayer’s relationship with certain offshore financial or securities accounts. All U.S.

Changes to the Internal Revenue Service’s Offshore Voluntary Disclosure Program (OVDP) have made headlines in recent months.

Most nations do not require their citizens to pay income taxes on money earned in another country. The United States, however, is different. Americans who fail to pay the applicable taxes on assets stored in an offshore bank account can face serious financial penalties. Currently, the Internal Revenue Service’s Offshore Voluntary Disclosure Program (OVDP) levies a 27.5 percent penalty for willful noncompliance with the nation’s tax laws. As part of recent changes to the OVDP, U.S.

A recent case out of Florida demonstrates the importance of properly complying with Report of Foreign Bank and Financial Accounts (FBAR) requirements. In United States v. Zwerner, the government filed a lawsuit seeking to recover approximately $3.5 million in civil penalties from an elderly man accused of failing to timely report his overseas assets.

It has grown increasingly difficult to evade the reach of IRS rules by concealing assets in offshore accounts. However, people who have kept their assets overseas have the opportunity to participate in the Offshore Voluntary Disclosure Program (OVDP) and avoid the threat of criminal prosecution for their non-compliance.

Under current United States tax law, citizens and permanent residents are compelled to pay income taxes on their earnings regardless of where the individual lives or works. Many taxpayers who live or store money overseas are unaware of their duty to pay taxes on income earned in a foreign nation. Others reportedly seek to evade paying their required share of income taxes. Either way, a U.S. citizen or permanent resident who fails to comply with federal income tax laws can face stringent penalties.

Last week, the IRS made a variety of changes to its Offshore Voluntary Disclosure Program (OVDP). These modifications are designed to give taxpayers incentives to disclose foreign accounts in greater numbers, a trend that already has been observed. People who comply with the OVDP need not fear the threat of criminal prosecution if they disclose any overseas accounts and pay the required penalty.

Recently, the IRS announced additional streamlined procedures and changes to its Offshore Voluntary Disclosure Program, in order to make it easier for taxpayers to satisfy their obligations regarding reporting offshore accounts. These changes do not result in an entirely new OVDP program; rather, they are a continuation of the previous OVDP programs introduced in 2009, 2011 (OVDI), and 2012. The IRS announcement contains expanded streamlined provisions for OVDP as well as changes to the existing 2012 OVDP program already in place.