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In order to avoid being disqualified from the program, it is in your best interest to contact an experienced tax attorney to find proper representation to your undisclosed foreign accounts as soon as possible. The legal team at Thorn Law Group is well positioned to advise clients on complex tax issues associated with their offshore accounts and other foreign financial assets.

The Offshore Voluntary Disclosure Program began in a slightly different form and with a slightly different name in 2009. It was on an offshoot of the traditional domestic voluntary disclosure program, which has been on the books for many years, focused on FBAR violations in particular. Under this program, taxpayers who had failed to report foreign bank and financial accounts or other foreign assets on their returns could be brought back into compliance and avoid criminal liability and the most severe civil penalties. The terms of the current 2012 voluntary disclosure program may be unappealing to many taxpayers.

The United States has recently enacted legislation commonly referred to as FATCA for the specific purpose of finding U.S. taxpayers who have unreported foreign accounts and income. FATCA requires foreign banks and financial institutions to report accounts held by U.S. taxpayer clients. FATCA and increased enforcement of civil and criminal penalties for unfiled Foreign Bank and Financial Account Reports , have given the IRS powerful new weapons in their search for undisclosed foreign assets and accounts.

The streamline disclosure program offers a chance for those who have committed non-willful violations of tax law by failing to report taxable foreign income-generating assets or bank / financial accounts, or other required foreign information reporting a chance to be brought back into compliance. However, the keyword regarding this program is “non-willful.” You must submit a certified statement that you did not willfully fail to disclose this information to avoid paying income taxes. If you are found to have falsely certified non-willfulness, severe criminal and civil penalties can occur. The IRS is now fully committed efforts to finding and prosecuting non-compliant U.S. taxpayers with undisclosed foreign source income and offshore accounts.

In addition, taxpayers must pay tax on the previously unreported income, interest, and certain penalties. Specifically, US taxpayers are required to comply with FATCA by properly disclosing and reporting their foreign accounts and foreign income in their Tax Return filings and FBAR reporting requirements of foreign and offshore accounts. In order to ensure the taxpayer has complied, the foreign financial institution issues a FATCA Letter, which will usually be accompanied by two forms – a W-9 and a W-8 BEN. Only US taxpayers are required to complete a W-9 and return the completed W-9 form to the foreign financial institution. As former IRS lawyers, our legal team has an extensive understanding of the U.S. tax laws and regulations governing foreign accounts and other financial assets held outside of the country. We know how the IRS and other federal authorities examine and investigate unreported offshore assets and accounts.

OVDP is designed to provide to taxpayers with such exposure protection from criminal liability and terms for resolving their civil tax and penalty obligations. cross border tax advice U.S. citizens must file U.S. tax returns and report and pay tax on their worldwide income. Subject to certain de minimis exceptions, if a U.S. citizen is a resident or citizen of Israel, he or she must file a U.S. income tax return and report his or her worldwide income to the IRS. The Form 114 is an annual report that must be filed independent of a taxpayer's tax return on or before June 30 of every year.

More than 30,000 voluntary disclosures have been made since the programs began in 2009, resulting in more than $5 billi