OVDI Is Over — What's Next for Voluntary Disclosures?
The IRS's second voluntary disclosure initiative for American taxpayers with unreported foreign accounts ended on September 9. That marked the closure of an extraordinary 32-month period dating back to February 2009, during which more than 50 years of IRS voluntary disclosure practice underwent a sea change. The many practitioners working in this offshore compliance ‘‘industry'' over the last three years have managed a wide array of intriguing clients, both domestic and foreign, and their emotions ranging from palpable fear to understandable anger and confusion. We have moved from a period of true partnership with the IRS in the summer of 2009 to a greater distrust of some IRS policies and penalty positions, and we now face substantial uncertainty about the IRS's plans for the future. However, the end of OVDI gives the IRS an opportunity to reap the maximum benefits of its and the Justice Department's significant enforcement victories over the last three years, reestablish a more productive relationship with professionals, and continue compliance gains if the voluntary disclosure program (VDP) is put on a stable, predictable footing. Click on PDF to read full article.