Taxpayers with foreign assets not yet disclosed to the IRS have a shrinking window of time within which they can report those assets with reduced penalties.
On March 13, 2018, the IRS announced it will end the Offshore Voluntary Disclosure Program (OVDP). No applications will be taken after September 28, 2018.
If a taxpayer has a financial interest in or signature authority over a foreign financial account exceeding certain thresholds, the law may require the taxpayer to file a Financial Crimes Enforcement Network Form 114, Report of Foreign Bank and Financial Accounts (FBAR).
Failure to make the required report can result in substantial penalties. Under the OVDP, those penalties can be reduced to 27.5 percent or 50 percent of the amount owed — possibly less depending upon the circumstances.
Taxpayers who failed to file the FBAR in prior years should consult their tax professional and determine if the OVDP is available, before it’s too late.