John D. Teter Law Offices



1361 South Winchester Boulevard, Suite 113
San Jose, CA 95128

Taxpayers with Unreported Foreign Assets Urged to Use Voluntary Disclosure Program or Face Serious Repercussions

Posted on in Taxation Law

California offshore tax attorney, Offshore Voluntary Disclosure Program, report foreign assets, unreported foreign assets, avoid criminal prosecutionThe IRS will soon be ending its Offshore Voluntary Disclosure Program for undisclosed foreign assets. Failure to utilize this disclosure program by the date of its termination on September 28, 2018, means that taxpayers who have not reported foreign assets can no longer do so with assurance of avoiding criminal prosecution.

What is the Offshore Voluntary Disclosure Program?

The Offshore Voluntary Disclosure Program (OVDP) was developed as a way for taxpayers to come into compliance with fewer legal consequences in situations where the taxpayer had previously not disclosed foreign assets and the income generated on those assets. The OVDP has existed in some iteration since 2009.

Now, however, the IRS has decided to end the program citing a decrease in the number of people coming forward, as well as an increased awareness by taxpayers of their duty to report foreign assets. The IRS has not yet given any indication of a termination date for its other offshore programs, the Streamlined Domestic Offshore and Streamlined Foreign Offshore procedures for taxpayers who meet certain “nonwillful” criteria, although it has clearly reserved that right.

Enforcement Tools

The IRS is adamant that ending the Offshore Voluntary Disclosure Program will not result in a decrease in focus on compliance with a taxpayer’s obligation to report assets held outside the United States. Ending offshore tax noncompliance remains significant to the IRS; hence, they will continue to be “actively engaged in ferreting out the identities of those with undisclosed foreign accounts with the use of information resources and increased data analytics.”

According to the IRS, voluntary disclosure is only one way it can bring about compliance. Other enforcement tools the IRS plans to continue to use are taxpayer education, Whistleblower leads, civil examination, and criminal prosecution.

Criminal prosecution is a real risk for anyone attempting to hide foreign assets. Since 2009, IRS Criminal Investigation has indicted 1,545 taxpayers on criminal offenses related to international activities. Of those indicted, 671 taxpayers were charged with international criminal tax violations.

Call a San Jose, CA Offshore Tax Lawyer

If you are concerned about foreign assets that may not have been previously disclosed to the IRS, speak with a tax attorney today. With assets that may not have been disclosed to the IRS, you will want to be cautious and understand any steps you do take, as well as the exposure you create for yourself either by disclosing or failing to disclose the assets.

Our firm’s knowledgeable California offshore tax attorney will be able confidentially to analyze your facts, discuss your alternatives, and tell you if you qualify for the voluntary disclosure program or any other IRS program and can help ensure you adhere to all IRS regulations. Call the John D. Teter Law Offices at 408-866-1810 to schedule your appointment today.


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