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OVDP and Voluntary Disclosures for Boston Residents

Offshore Account Update

Posted on September 30, 2019 |

For several years, Boston residents who failed to report their foreign financial assets to the Internal Revenue Service (IRS) were able to mitigate the consequences of their omission through the IRS’s Offshore Voluntary Disclosure Program (OVDP). However, the OVDP ended on September 28, 2018. While taxpayers still have options for voluntarily disclosing their offshore holdings, there are some important limitations. As a result, consulting one of the Boston IRS voluntary disclosure lawyers at Thorn Law Group is critical to avoiding substantial penalties.

What is the New Alternative to the OVDP?

Now that the OVDP has ended, the primary option available for voluntarily disclosing offshore holdings to the IRS is to utilize the federal streamlined filing procedures. To be clear, use of the streamlined filing procedures is only necessary if you are behind on your offshore disclosure obligations. If you have consistently filed IRS Form 8938 (and all other necessary forms) in order to report your foreign financial assets to the IRS, then you do not need to submit a streamlined filing. That said, if you have any concerns about the adequacy of your prior offshore disclosures, then you should absolutely consult with one of our Boston OVDP lawyers to ensure that you are not at risk for civil or criminal prosecution.

Similar to the OVDP, the IRS’ streamlined filing program is subject to a number of limitations. However, these limitations are different from those that previously applied to OVDP filings. Most notably, while the OVDP was available to all U.S. taxpayers, the streamlined filing procedures are only available to taxpayers who non-willfully failed to report their offshore holdings to the IRS. In order to be considered “non-willful,” a failure to file must be the result of either:

  • Negligence,
  • Inadvertence,
  • Mistake, or
  • Good-faith misunderstanding of the law.

Additionally, the streamlined filing program is only available to individual taxpayers with valid tax identification numbers; and, in order to file, you must not be subject to a civil examination, criminal investigation or any outstanding IRS penalties.

What if I am Not Eligible to Submit a Streamlined Filing?

If you are concerned that you may be ineligible to submit a streamlined filing, what options do you have available? The answer will depend on the nature (and aggregate value) of your offshore holdings as well as various other factors that are unique to your personal circumstances. However, one fact is clear: You should not submit a streamlined filing if you are ineligible to do so. If you do, you could trigger an audit or investigation, and you could expose yourself to substantial civil or criminal penalties. Learn more: Pitfalls of Streamlined Disclosure.

Contact the Boston IRS Voluntary Disclosure Lawyers at Thorn Law Group

If you would like more information about the options for voluntarily disclosing your foreign financial assets to the IRS, we encourage you to contact us promptly for a confidential consultation. To speak with Managing Partner Kevin E. Thorn and his team of highly-experienced Boston IRS voluntary disclosure lawyers in confidence, call Thorn Law Group at 617-692-2989 or inquire online now.

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