OVDP 2012 & Its Necessary Implications
Under the revised policies of IRS it is essential to make a voluntary disclosure of any undisclosed foreign accounts in order to remain compliant and avert any kind of civil penalties. This also helps to eradicate the risk of legal prosecution under the updated OVDP i.e. Offshore Voluntary Disclosure Program.
The OVDP 2012 which is the third overseas program comes as the IRS Amnesty carries on working on a diverse range of internal tax concerns following practices with the Justice Department to pursue criminal prosecution for evading international tax. However, the primary objective of OVDP is to make taxpayers having undisclosed foreign accounts declare the foreign accounts and stay compliant with the tax laws applicable in the United States. The OVDP 2012 penalty needs participants to:
* Pay a high penalty of 27.5% of the highest aggregate balance in unreported foreign accounts at the time of the eight full tax years prior to the disclosure.
* File each and every original and amended tax return and include payment for back-taxes and interest up to eight years. It also entails paying off any accuracy-related and/or delinquency penalties.
OVDP Benefits
Taxpayers who have willingly come forward and made voluntary disclosures since the 2011 closure, they will be treated under the 2012 OVDP provisions. Other benefits that tax payers can enjoy are as follows:
* As opposed to 2011 OVDI, there are no strict application deadlines for the taxpayers under 2012 OVDP. It is however essential to note that the IRS can modify the terms of 2012 OVDP as per their discretion
* A voluntary disclosure comes with the scope to estimate with a reasonable amount of certainty, the overall cost of solving all offshore tax concerns
* You are immune from criminal penalties or any other kind of Jail Time
In order to make the most of OVDP 2012, you can join hands with a tax planning agency in the United States that can provide a complete knowledge of the tax codes that is applicable to US resident individuals, US citizens and Green Card holders. It also helps in the following ways:
* Consultation and Impact Analysis
* Analysis and Planning to reduce FBAR Penalty
* AMT Strategies, Foreign Tax Credit
* Review of 2009, and 2010 OVDI cases
* Mutual Fund or PFIC computations
* Preparation of forms required to participate in the OVDP program
* Preparation of Tax Amendments and Delinquent FBAR
* IRS Representation by Enrolled Agents or Affiliated CPAs and Attorneys
Therefore, partnering with a tax planning agency for OVDP 2012 results in complete compliance and free from all legal hassles.
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