Mark Matthews Comments on Closure of IRS Offshore Voluntary Disclosure Program
The IRS has announced that it will close its offshore voluntary disclosure program on September 28.
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Mark E. Matthews of Caplin & Drysdale, Chtd. said that the recent, precipitous decline in OVDP submissions makes the end of the program unsurprising, especially since the IRS previously warned that the OVDP would eventually end.
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“I think it is encouraging and good practice for the IRS that they are seeking practitioner comments,” Matthews said. “We appreciate that opportunity.”
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As a result of a 2015 IRS memorandum (SBSE-04-0515-0025) that generally limits the penalty for willful failure to file FBARs to 50 percent of the high value of the account during open years, the closure will likely have limited impact on those taxpayers who failed to file or filed false FBARs, Matthews said. The primary effect of the OVDP closure may be to put the sections 6663 and 6651(f) fraud penalties and other, non-FBAR information return penalties in play, he added.
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Excerpt taken from the article “IRS Offshore Voluntary Disclosure Program to Close in September” by Nathan J. Richman for Tax Notes. Andrew Velarde contributed to this article.