For readers of our criminal law blog in Texas and elsewhere seeking a bit of a refresher on the IRS initiative entitled the Offshore Voluntary Disclosure Program, here’s your update: The OVDP will cease to exist come September 28.
We actually informed our blog audience of that in a post from a few months ago, noting in our May 3 entry that flatly welcoming the program’s upcoming demise might be “an illogical response for many.”
True, the OVDP will no longer be operative as a tool for coaxing individuals with undeclared assets held overseas (the IRS simply calls them tax cheats) to come clean and pay a mitigated penalty in lieu of harsher exactions. Some taxpayers might think that program demise spells IRS indifference going forward.
OVDP’s termination likely does not equate with IRS apathy, though. Indeed, some tax insiders think that agency scrutiny will increase in intensity once ODVP has gone by the wayside. One of them says that the IRS will be “less inclined to offer a sweet deal to non-compliant taxpayers.”
A recent article on undeclared offshore holdings that arguably amount to tax fraud buttresses the claim that the IRS will perhaps be more aggressive than ever about uncovering fraud and punishing wrongdoers in the wake of OVDP. That piece stresses that, even though program oversight will now be gone, the IRS “promises to continue its crackdown on foreign tax dodging.”
Only about 600 individuals disclosed unlawful accounts to the IRS via OVDP last year. It is that paltry level of participation that is bringing the program to its imminent closure.
Will the tax agency in fact become more aggressive and enforcement-minded in its aftermath, as suggested above?
Time will soon tell. Individuals with questions or concerns regarding undeclared assets held offshore might reasonably want to confer with attorneys from a proven fraud-defense law firm.