Well, that set-in-stone and underscored deadline of September 28 came and passed. The earth still orbits the sun. People still go about their lives today largely as they did before that calendar date faded into the background.
Most of them, anyway.
As for select others, they are perhaps biting their nails and regularly approaching their mail boxes with trepidation. What they don’t want to see is this: a communication from the Internal Revenue Service that references their overseas financial holdings and indicates tax authorities’ interest in their further examination.
Such an IRS pinging-in would relate to matters that were formerly within the purview of the so-called Offshore Voluntary Disclosure Program. We have referenced the agency’s OVDP initiative in prior blog posts, most recently our September 20 entry. We noted therein that key “cease to exist” date of September 28, remarking that some Americans with overseas assets were unquestionably happy to see it come and go.
We also stressed in that post that euphoria is likely a misplaced emotion relevant to the OVDP’s demise.
Let’s backtrack for a moment. The OVDP was in fact welcomed by some payers who voluntarily disclosed untaxed assets and then willingly paid mitigated penalties to clear their records. Many people opted not to come forward, though, simply waiting for the program’s end and hoping that its termination spelled IRS indifference toward enforcement following its conclusion.
That mindset might be misguided, and sorely so. We noted in the above post that the OVDP’s closure “likely does not equate with IRS apathy.” One program commentator stresses that the agency might now reasonably be “less inclined to offer a sweet deal to non-compliant taxpayers.”
Analysis from a recent Forbes article that closely examines new disclosure/penalty rules supplanting OVDP dictates strongly supports that view. It notes that what has replaced the former program is “considerably more severe” than what existed before.
We’ll take a look at the relevant details in our next blog post.