A: The Offshore Volunteer Disclosure Initiative, also known as the Offshore Volunteer Disclosure Program, is a program created by the IRS to give those with unreported offshore bank accounts a chance to report the funds without facing criminal prosecution. The program was created in 2009 and has been updated a couple of times since then.Q: What is the object of OVDI?
A: The ultimate objective is to bring taxpayers into compliance with U.S. tax laws without the fear of being accused of tax evasion or other criminal charges.
Q: Why should I make a voluntary disclosure?
A: If for no other reason, you avoid criminal prosecution as well as some hefty civil penalties. Although you will be facing a penalty, it is no where near as large as the one you would face by not disclosing your accounts. And don’t think that the IRS won’t find you if it hasn’t already – it always gets its money. And once you’re under examination, you won’t be able to apply for OVDI.
Q: Can I still apply for the program if I can’t pay the penalties in full?
A: Absolutely. First know that by voluntarily disclosing these accounts, the penalties you will be facing are not as severe if you don’t apply. And just like anyone facing a penalty or back taxes with the IRS, there are numerous programs that can help you pay what you owe, such as payment plans, settlement plans, and offers in compromise. Remember, it’s better to disclose your assets now than wait until the IRS catches up with you.
Q: Do I qualify for the program?
A: If you have an offshore account or assets that are worth more than $10,000 and you haven’t disclosed this to the IRS, then you are eligible for the program. You are only ineligible if you are currently being investigated by the Department of Justice.
Q: What are the steps to applying for an OVDI?
A: First, it’s best to hire an experienced OVDI attorney to help you with the process since it can get pretty complicated. First, you need to request pre-clearance from the IRS. If you are accepted, then you can make a disclosure statement, along with various attachments.
If you have any more questions about the OVDI program, visit the IRS website. However, if you plan on applying, don’t do it alone! Contact the OVDI tax attorneys at Pro Tax Councel for a free consultation of your case.