IRS tax amnesty program to end this month

Cayman Compass is the Cayman Islands' most trusted news website. We provide you with the latest breaking news from the Cayman Islands, as well as other parts of the Caribbean.
Cayman Compass is the Cayman Islands' most-trusted news website. We provide you with the latest breaking news from the Cayman Islands, as well as other parts of the Caribbean.

The Internal Revenue Service reminded U.S. taxpayers that they have until Sept. 28 to apply for the Offshore Voluntary Disclosure Program (OVDP).

Since the OVDP’s initial launch in 2009, more than 56,000 taxpayers have used the various terms of the program to comply voluntarily with U.S. tax laws. These taxpayers with undisclosed offshore accounts have paid a total of $11.1 billion in back taxes, interest and penalties.

The planned end of the current OVDP comes as the Foreign Account Tax Compliance Act has taken effect and U.S. taxpayers have become more aware of their offshore tax and reporting obligations. FATCA forces financial institutions worldwide to report the assets and account holdings of U.S. taxpayers to the IRS or incur withholding tax penalties in their transactions with the United States.

The IRS first announced the end of the program in March and warned it will continue to hold taxpayers with undisclosed offshore accounts accountable after the program closes.

The number of taxpayer disclosures under the OVDP peaked in 2011, when about 18,000 people came forward. The figures then steadily declined through the years, falling to only 600 disclosures in 2017.

Since the announcement, the IRS has not received any public comments addressing a continued need for the OVDP. The tax authorities will maintain a pathway for taxpayers who may have committed criminal acts to voluntarily disclose their past actions and come into compliance with the tax system. Updated procedures will be announced soon.

The IRS said it will continues to fight offshore tax avoidance and evasion using whistleblower leads, civil examination and criminal prosecution. Since 2009, 1,545 taxpayers have been indicted in relation to their international activities as a result of the work of IRS Criminal Investigation.

A separate program, the Streamlined Filing Compliance Procedures, for taxpayers who may have been unaware of their filing obligations, has brought about 65,000 additional taxpayers into compliance. As with OVDP, the IRS has said it may end this program too at some point.

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