If you’re an American with foreign assets, you’re most likely familiar with the acronym OVDI or OVDP lawyer.
It stands for Offshore Voluntary Disclosure Initiative, and it started out as a partial tax amnesty for U.S. taxpayers who didn’t disclose their offshore accounts on February 2011. Since then, it has become synonymous with the process of filing Form TD 90-22.1 (Report of Foreign Bank and Financial Accounts).
OVDI and You
OVDI requires American taxpayers to disclose their foreign assets. This includes bank accounts and real estate property, and there are penalties for not doing so. Like income tax filing, OVDI regulations can be hard to understand. That’s why you need to find an OVDP lawyer to help you prevent problem that can come up later on.
An Attack on Offshore Investors
The OVDI is one of many IRS initiatives that are part of an attempt to crack down on American taxpayers with offshore investments. For a long time, they have believed that they are being used for tax evasion.
Law enforcement officials have come up with the same conclusion. Offshore accounts can be used for some of the most serious crimes — some of which can include:
- Money laundering
- Drug smuggling
Your Legal Requirements
The IRS requires any American with ownership rights or any fiduciary interest in a foreign asset to file the FBAR form if it falls within certain guidelines. This can include a foreign bank account or any real estate property in another country.
Foreign bank accounts that have had a balance of $10,000 at any point in a calendar year must be reported on an FBAR, and there are stiff penalties for not doing so. They can include:
- Being labeled as a felon
- Paying a fine of $250,000
- Serving up to five years in federal prison
If you deliberately fail to file, you could pay a fine of $100,000 or 50% of the account balance. While there are some cases where restitution and criminal prosecution can be avoided, it rarely happens.
It’s Not Just Filing
Even if you have filed the OVDI, you are still not safe from potential fines or prosecution. People who file an OVDI are subject to further scrutiny, and the IRS can look at their previous ten tax returns. They may even have to file amended returns so they can stay in compliance. Not only will they have to pay the adjusted tax, but they may have to pay an extra 20% in interest.
Do Not Risk It
Because of the risks involved for not disclosing foreign assets, you need to find a qualified legal team to help you with your OVDI or OVDP filing. It will make sure that you are in compliance, which can save you from any trouble in the future. The IRS is backed by the federal government, so it has the resources to come after you.
Because of the complexities of just filing personal or corporate taxes, you have every reason to hire a professional. Hiring the right person for the job can help you avoid an audit.
Just an Honest Mistake?
In the past, a taxpayer that hasn’t paid for several years would get a slap on the wrist. With the OVDP and OVDI, this is not the case. If you fail to comply, you can expect to see the following:
- fines for failing to pay
- penalties up to 27.5%
- possible criminal charges
Contact an OVDP Lawyer
Because of the complexities associated with taxation, accounting, and reporting foreign assets, you need to find an attorney to protect your interests.
And an OVDP lawyer at the Gordon Law Group will be your best resource for doing so.
Our experience with domestic and international clients has helped us to build our practical expertise on the many areas involving the ownership of foreign assets.
Contact us today to schedule a consultation. We can help you and your company stays in compliance and to avoid obstacles that could jeopardize your freedom and your livelihood. We are an OVDP lawyer that has in the industry for a long time, and we can give you everything you need to continue on your path to success.Contact Us Today »