On June 26, 2012, the IRS announced details of its Offshore Voluntary Disclosure Program by issuing a new set of Frequently Asked Questions.
The IRS also issued two press releases. In one it announced that its Offshore Voluntary Disclosure Program has resulted in the collection of more than $5 billion in back taxes, interest and penalties from 33,000 voluntary disclosures made under the first two programs.
Another 1,500 disclosures have been made under the new program announced in January. The current OVDP raises the offshore penalty from 27.5% from 25% in the 2011 program. However, the reduced penalty categories of 5 and 12.5 % are still available.
The IRS announced that, if a taxpayer with offshore accounts challenges in a foreign court the disclosure of tax information by that government and does not notify the U.S. Justice Department of the appeal, the taxpayer will no longer be eligible for the OVDP.
The IRS also announced a plan to help US citizens residing overseas to catch up with tax filing obligations and assistance for people with foreign retirement plan issues.
Starting September 1, 2012, U.S. taxpayers living abroad who have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs) and who owe $1,500 or less in tax for any of the covered years, will have a new option to comply with their obligations. They will have to file deliquent tax returns along with appropriate related information returns for the past three years and to file delinquent FBARs for the past six eyars.
The three items will be posted to www.IRS.gov/newsroom, but are not posted yet:
IRS Says Offshore Effort Tops $5 Billion, Announces New Details on the Voluntary DisclosureProgram and Closing of Offshore Loophole, IR-2012-65
IRS Announces Efforts to Help U.S. Citizens Overseas, Including Dual Citiziens and Those with Foreign Retirement Plans, IR-2012-65
Offshore Voluntary Disclosure Program Frequently Asked Questions and Ansers