IRS Program Shutdown Might Bring Even Harsher Enforcement Penalties

In White Collar Crimes by RSFJ

On behalf of Rosenblum Schwartz & Fry posted in White Collar Crimes on Tuesday, May 1, 2018.

Many thousands of Americans with overseas financial holdings have long chafed under the IRS collection initiative termed the Offshore Voluntary Disclosure Program. Since the OVDP was launched in 2009, 56,000-plus taxpayers have reportedly stepped forward to comply with its reporting requirements in lieu of risking harsher sanctions for not doing so. The IRS states that it has collected more than $11 billion through the program.

And now it is scheduled to terminate, with September 28 being its announced cut-off date.

It would be sheer understatement to note that legions of filers – both individuals with undeclared offshore assets and high numbers of expats simply trying to work their way through the OVDP’s marked complexity – are happy to say goodbye to the collection mechanism.

Perhaps many of them shouldn’t be so delighted to see its demise.

Here’s why, according to a formerly high placed government tax official: The IRS announcement is likely “a wake-up call.” Moreover, adds ex-DOJ Tax Division head Caroline Ciraolo in a national article penned recently, “the terms offered to willful taxpayers seeking to come into compliance after September 28 will not improve.”

They just might be far worse. The IRS has engaged in a years-long shakedown of foreign banks with American account holders, and now has reams of personal information and data it can use to investigate filers. Once the OVDP is gone, so too will be its comparatively softer sanctions applied to evaders who voluntarily come forward. Come October, states Ciraolo, a play-nice approach from the IRS might be replaced by an “iron fist.”

With the clock ticking down on the OVDP, some individuals with tax concerns relating to overseas accounts might reasonably want to take purposeful action. That can include a timely, candid and confidential discussion with experienced attorneys having a demonstrated record of client advocacy in white collar criminal matters, including tax fraud and evasion.