Over the past several years, the IRS has implemented various amnesty programs aimed at reducing the number of delinquent US tax filers.
Earlier this year, the IRS announced that one of these programs – the Offshore Voluntary Disclosure Program (OVDP) – would end on September 28, 2018. More than 56,000 taxpayers have taken advantage of this program under which the IRS has collected more than $11.1 Billion in back taxes, interest and penalties. In the September 4th announcement conFirming the ending of the OVDP program, the IRS indicated that a separate program – the Streamlined Filing Compliance Procedures – will continue to be available for now but that program may end too at some point. Given the fact that the IRS provided a 6 month notice period for the termination of the OVDP program, it is conceivable that the Streamlined Program could come to an end in the next couple of years, if not sooner. To date, more than 65,000 taxpayers who may have been unaware of their US tax filing obligations have come into compliance through the Streamlined Program.
NON-COMPLIANT US TAXPAYERS
If you are not in compliance with your US tax filing requirements, there is still time to get caught up through the Streamlined Program. Under that program, the IRS expects taxpayers to file US Federal income tax returns for the three most recent taxation years. The program also requires the filing of Foreign Bank Account Reporting (FBAR) forms for the past six years if the aggregate value of your foreign financial accounts (i.e. bank accounts, retirement accounts, investment accounts) exceeds $10,000 US at any time during the year.
ELIGIBILITY FOR AMNESTY PROGRAMS
With the US government’s FATCA legislation in place and with international partners such as the Canada Revenue Agency assisting with the accumulation and dissemination of financial information to the IRS, it may be a matter of time before non-compliant US taxpayers (i.e. US citizens or green card holders) are identified by the IRS. Once a taxpayer has been identified by the IRS for non-compliance, they are no longer eligible for any of the amnesty programs.
For more information on this topic, please contact your McCay Duff advisor.Contact Us