Offshore vs Streamlined Filing Compliance
OVDP vs Streamlined: Comparing OVDP vs Streamlined is complicated. U.S. Taxpayers who have not reported foreign accounts (FBAR & FATCA) or income to the IRS in prior years may be eligible for these programs. Both of these offshore compliance programs are designed to reduce and eliminate offshore penalties.
OVDP is the Offshore Voluntary Disclosure Program. Streamlined involves the Streamlined Filing Compliance Procedures. Even though the IRS closed OVDP in 2018, they also expanded the traditional voluntary disclosure on matters involving offshore disclosure.
When a U.S. person has offshore or foreign accounts, assets, investments & income that has not been properly reported to the IRS, they have a decision to make.
They can either:
- Submit to “new” OVDP (Updated in 2018/2019)
- Submit to the Streamlined Program or Delinquency Procedures
- Prepare a Reasonable Cause Application
- Make an illegal Quiet Disclosure
Since the IRS has increased enforcement of foreign accounts compliance, and can close these programs without much notice — time is of the essence.
We have prepared a 2020 OVDP vs Streamlined Program comparison update.
IRS Offshore Voluntary Disclosure Program (OVDP)
When OVDP (Offshore Voluntary Disclosure Program) ended back in September 2018, the Internal Revenue Service was unclear as to whether a New “Offshore” Voluntary Disclosure Program would be introduced.
Instead of a “new program,” the traditional voluntary disclosure program was expanded.
You can use the disclosure program to submit FBARs for your Foreign Bank Accounts, FATCA, PFIC, along with your Domestic Income as well.
IRS Streamlined Procedures
IRS Streamlined Filing Compliance Procedures are a stand-alone “streamlined” version of the traditional OVDP.
The “stand-alone” streamlined filing procedures were created in 2014 by the Internal Revenue Service.
The purpose of the procedures are to assist taxpayers who were noncompliant with offshore reporting requirements – but were also non-willful.
If the Taxpayer can certify under penalty of perjury of being non-willful, the IRS reduces the penalty structure, and even waives the penalty for applicants who qualify as foreign residents.
IRS Streamlined Domestic
The Streamlined Domestic (SDOP).
It is the program designed for for U.S. persons residing in the United States (or do not meet the technical “Foreign Resident Test”)
IRS Streamlined Foreign
The Streamlined Foreign (SFOP) is the Streamlined Foreign Offshore Procedures.
These are the Procedures for U.S. persons residing outside the United States is referred to as the Streamlined Foreign Offshore Procedures.
Delinquency Procedures for International Information Return
The Delinquency Procedures are an alternative to OVDP and Streamlined.
If you do not have any unreported income resulting in having to amend your tax returns — and all you have is unreported foreign assets, accounts or investments with no unreported income, you may be in luck.
In these instances, in which you do not otherwise need to file for traditional offshore disclosure or the Streamlined Filing Compliance Procedures — you may qualify for the Delinquency Procedures and avoid any penalties.
RC – Reasonable Cause for Offshore & Foreign Accounts and Assets
Reasonable Cause may be an option for some taxpayers.
Specifically, if you were completely non-willful in your failure to disclosure, and were unaware that there was any reporting requirement, then the thought of paying any penalty may sound absurd.
IRS Offshore Penalties
It is important that if you are non-compliant, that you consider making an offshore disclosure submission. This will help to reduce, minimize, and/or even avoid penalties.
Here is a brief list of the potential penalties you can get hit with by the IRS:
- FBAR Penalties
- 3520 Penalties
- 3520-A Penalties
- Form 5471 Penalties
- Form 5472 Penalties
- Form 8621 Penalties
- Form 8938 Penalties
- Form 8865 Penalties
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.
Each case is led by a Board-Certified Tax Law Specialist with 20 years of experience, and the entire matter (tax and legal) is handled by our team, in-house.
*Please beware of copycat tax and law firms misleading the public about their credentials and experience.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced Offshore Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
- Dually Licensed as an EA (Enrolled Agent) or CPA
Interested in Learning More about Golding & Golding?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.