If you have been untrue regarding your foreign income and assets, it will not take long before you are caught in the act. The IRS is a powerful entity that will soon discover the ways that you’ve hidden the truth when it comes to your income. The best course of action that you can take, if you have made these mistakes in the past, is to own up to it and take part in the offshore voluntary disclosure program before it is too late.

What is the Offshore Voluntary Disclosure Program?

If a tax payer has evaded the IRS by withholding information related to foreign income and assets, the offshore voluntary disclosure program is a way in which these tax payers can make it right. There are far fewer penalties and repercussions involved in admitting fault through this program than there would be by continuing to withhold information until the IRS launches their own investigation into the matter. Taxpayers who choose to utilize undisclosed foreign accounts and assets, including those held in undisclosed foreign entities, occasionally do so in an attempt to avoid or evade tax. The IRS created the offshore voluntary disclosure program as a way to bring these taxpayers into compliance with US tax and related laws. Even though the decision to withhold this information was intentional, this program was designed with those willing to make a change in mind.

How to Take Part in the Offshore Voluntary Disclosure Program

In order to move forward in the process of utilizing the offshore voluntary disclosure program, the taxpayer must meet the eligibility requirements of the program. In order to comply with US law, the funds contained within the undisclosed assets cannot be related to criminal activity of any kind, and the taxpayer who is requesting the program cannot already be under civil or criminal investigation by the IRS. It is important that this program be voluntary in nature. It is not intended to be a way out for those who are already in danger of criminal charges, but rather as a way for those who have made a mistake—before the situation gets too dire. If failing to disclose foreign income and assets has been an issue for quite some time, it is possible to file or amend up to eight years of tax returns and Foreign Bank and Financial Accounts (FBARs) at the same time. These FBARs can include bank accounts, mutual funds, trust funds, and many other types of financial interests.

What is the Purpose of the Offshore Voluntary Disclosure Program?

The most important aspect of this program is that it is voluntary. By waiting for the IRS to come to you, the taxpayer, you are forcing the mandatory investigation of your foreign income and assets. If you are found guilty of withholding such information from the US government, you will be susceptible to charges and fines that will be laid upon you by the IRS and the United States government. Instead, the offshore voluntary disclosure program allows participants to choose. When a taxpayer makes the decision to voluntarily take part in the offshore voluntary disclosure program, someone who has evaded taxes in the past can prove to the IRS that they can actually be trustworthy when it comes to their yearly declaration of income tax. Once filling out the documents necessary for the program, previously evasive individuals are given the opportunity to pay back the taxes, interest, and penalties that are determined outstanding on their foreign accounts. After all of the necessary paperwork has been filled out and the penalties have been paid, yet another taxpayer is released from the clutches of the IRS by proving that they can, indeed, be trusted to declare their income properly in the coming year.


Esquire Group, a boutique international tax advisory firm specializing in tax consulting, tax planning and compliance and helping corporate and individual taxpayers with Offshore Voluntary Disclosure Program ( Esquiregroup.Com/Offshore-voluntary-disclosure-program ), asset protection, and US expat taxes. To learn more about us, visit Esquiregroup.Com/About.