The IRS on Tuesday announced details of a special voluntary disclosure initiative designed to bring offshore money back into the U.S. tax system and help people with undisclosed income from hidden offshore accounts get current with their taxes. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available through Aug. 31.
The announcement followed a Jan. 26 AdvisorOne report that the IRS had announced a new amnesty initiative and would provide details later. An earlier voluntary amnesty program, which ended in October 2009, saw some 15,000 taxpayers come forward covering banks in more than 60 countries. An agency spokesman declined to name leading offshore sites for hidden accounts.
"As we continue to amass more information and pursue more people internationally, the risk to individuals hiding assets offshore is increasing," IRS commissionerDoug Shulman said in a statement. "This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all. And it gives people a chance to come in before we find them."
The IRS said its decision to open a second special disclosure initiative follows continuing interest from taxpayers with foreign accounts. Since the first voluntary program ended, more than 3,000 taxpayers have come forward with bank accounts from around the world. These will also be eligible to take advantage of the special provisions of the new initiative.
Procrastination Hurts
People who did not avail themselves of the 2009 Offshore Voluntary Disclosure Program will be penalized for waiting. "Make no mistake, this [new] program contains a tough set of guidelines," Shulman said in a statement.
