2014 Offshore voluntary disclosure program

2014 OVDP

The new 2014 OVDP, which modifies but does not supplant the 2012 OVDP, makes the following key changes to the 2012 OVDP:

1. Requires disclosure of much more substantive information from taxpayers applying for pre-clearance into the program.
2. Eliminates the existing reduced penalty percentage for certain non-willful taxpayers in light of the expansion of the streamlined procedures.
3. Requires taxpayers to submit all foreign account statements regardless of account balances for the disclosure period.
4. Mandates remittance of all taxes, interest and penalties, including the offshore penalty, at the time of the OVDP submission of required documents.
5. Enables taxpayers to submit voluminous records electronically rather than on paper.
6. Increases the miscellaneous offshore penalty from 27.5% to 50% if,  before the taxpayer’s OVDP pre-clearance request   is submitted, a public disclosure occurs indicating that a financial institution where the taxpayer holds an account, or another party facilitating the taxpayer’s offshore arrangement is (a) under investigation by, (b) cooperating with, or (c) providing subpoenaed information to the IRS or Department of Justice (DOJ).

As with the 2012 OVDP, the terms of the 2014 OVDP could change at any time. For instance, the IRS could increase penalties or limit eligibility in the program for all or some taxpayers or defined classes of taxpayers or decide to end the program entirely at any time.