2011 Offshore Voluntary Disclosure Initiative
18 February 2011Tax Alert
On February 8, 2011 the Internal Revenue Service (IRS) unveiled its latest initiative to encourage taxpayers to report undisclosed foreign accounts and assets and unreported income from such accounts and assets. The program, titled the 2011 Offshore Voluntary Disclosure Initiative (2011 OVDI), offers eligible taxpayers several incentives for reporting offshore assets maintained during the 2003 through 2010 tax years covered by the program. The program enables delinquent taxpayers to become compliant, avoid compounded civil penalties, minimize the risk of criminal prosecution, and calculate, with a relative degree of certainty, the total cost of resolving offshore tax issues. In exchange, participants in the initiative must, among other things, file all original or amended tax returns, update all offshore information returns, agree to extend the statute of limitations on assessment, remit all back taxes, along with interest and penalties, and execute a Closing Agreement with the IRS.
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