A new voluntary disclosure program, the 2011 Offshore Voluntary Disclosure Initiative was announced February 8th by the Internal Revenue Service (“IRS”) to encourage taxpayers with undisclosed offshore accounts/assets to disclose and report such information to the IRS. The program is open through August 31, 2011. All requirements must be met by this date to participate in the program.
The IRS decision to launch this program follows the success of its initial voluntary disclosure program that ended on October 15, 2009 and resulted in more than 15,000 voluntary disclosures. The terms of the new program, while less generous than the 2009 program, are compelling given the elevated risks of nondisclosure. Noncompliant taxpayers are potentially subject to substantial civil penalties, including fraud and foreign information return penalties, and criminal prosecution.
Key features of this program are included in the full Tax Alert.