The IRS Will End Offshore Voluntary Disclosure Program This Month – Miss Out and You Could Face Jail

The Offshore Voluntary Disclosure Program, which has been in effect since March, 2009, will close September 28th.  For those taxpayers who have unreported offshore accounts and assets, the programs offers a chance to pay substantially less in back taxes, interest and penalties and more importantly, to avoid criminal prosecution.

The benefit of the program allows taxpayers who failed to file a Report of Foreign Bank and Financial Accounts, or FBAR, to amend their tax returns only going back 8 years and pay the tax, interest and reduced penalties ranging from 20%-27.5%, as opposed to 50% and going back 15 years if the taxpayer does not go through the program and is caught failing to file an FBAR.  The biggest benefit is that they will also not face jail time, which could be up to 5 years imprisonment per violation and a felony conviction on their record.

In the last 9 years, more than 56,000 taxpayers have entered the program and paid a total of $11.1 billion in back taxes.