In the wake of such scandals as the Panama Papers, there are likely many folks out there, either on home soil or abroad, who fear that they might be in danger of being prosecuted for tax fraud. First of all, the tax evasion that these scandals have at their heart is on a much larger scale ( www.EsquireGroup.com/Offshore-Voluntary-D
What is it?
The Offshore Voluntary Disclosure Program is tailored for people who have chosen not to disclose or pay taxes on foreign assets. That is to say, the premise of the program understands that individuals have intentionally withheld due tax dollars from the American government. Now, depending on the scale and amount of time your assets have remain undisclosed (up to 8 years), you could face criminal prosecution, and not just a civil suit. The benefit of the OVDP is that, by registering and seeing the process through, an individual will avoid this kind of criminal prosecution. Unfortunately, this does not mean that the indebted individual gets off scot-free. Paying back the taxes owed, with interest and with penalties, is all part of the deal.
That said, there are other means of making up for lost money over lost time.
These include making what the IRS recognizes as amended returns or applying to the Streamlined Filing Compliance Procedures. For all that, these means do not diminish, let alone eliminate, the risk of being subject to criminal prosecution. The Offshore Voluntary Disclosure Program is the only one which does so. To add some perspective, although most of us despise paperwork, the substantial paperwork required to complete the OVDP is paltry compared to a potential five years in prison and a maximum penalty of $250,000. Furthermore, the IRS, ever a stickler for timeliness, considers the alacrity and celerity of disclosures an enormous asset in reviewing disclosures; consulting with a tax lawyer will, at this point, be the most efficient recourse.
Also, since neither the IRS nor the American government can prosecute exclusively foreign institutions, such as banks, they will come after you if your bank is considered to be under investigation for shady dealings. You will be subject to a 50% miscellaneous fine on all assets that the government perceives to be beneficial to you ( www.EsquireGroup.com/About ), the foreign institution’s account holder. And finally, you are only eligible to apply to the Offshore Voluntary Disclosure Program if your earnings proceed from legal sources.