• 2011 Offshore Voluntary Disclosure Initiative - Mainly Good News But Some Bad News Too
  • February 21, 2011 | Authors: Michael D. Foster; Charles K. Kolstad; Kelly Moore Nowottnick
  • Law Firms: Venable LLP - Los Angeles Office ; Venable LLP - Baltimore Office
  • On February 8, 2011, the IRS Commissioner announced a second offshore voluntary disclosure initiative (the “2011 OVDI”) for U.S. taxpayers who still have unreported foreign accounts. The 2011 OVDI follows the IRS's hugely successful 2009 Offshore Voluntary Disclosure Program (the “2009 OVDP”). The 2011 OVDI largely continues the practices of the 2009 OVDP, but it imposes higher penalties and taxes. The good news is that the penalty was only increased from 20% to 25% and that criminal prosecution will not be recommended for complying participants; the bad news is that taxes, tax penalties, and interest have to be paid for an 8-year period rather than a 6-year period.