2017 OVDP Declines and Withdrawals Campaign: Certain U.S. Taxpayers at Risk of Audit

Publication Name: 

2017 OVDP Declines and Withdrawals Campaign: Certain U.S. Taxpayers at Risk of Audit

Date: 
Wednesday, June 14, 2017

 

In 2016, the Treasury Inspector General for Tax Administration (TIGTA) released a report which assessed how well that IRS was managing the Offshore Voluntary Disclosure Program (OVDP). OVDP is one of the programs taxpayers may use to become compliant if they previously had failed to report offshore income on their tax returns and file Reports of Foreign Bank and Financial Accounts (FBARs). Currently, it is estimated that almost 56,000 taxpayers have become compliant through OVDP, paying just under $10 billion in taxes, penalties and interest.

One of TIGTAs findings was that the IRS had not followed up on a number of non-compliant taxpayers who requested participation in OVDP, but were either denied access or withdrew from OVDP. TIGTA believes that a significant portion of these taxpayers may still be non-compliant. Their recommendation was that the IRS should review denied or withdrawn OVDP applications for potential FBAR penalty assessments and potential criminal investigation.

In response, the IRS rolled out the 2017 OVDP Declines-Withdrawals Campaign which is being overseen by its Large Business and International Division (LB&I).

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