Confused about the advantages and disadvantages of
Streamlined Program vs Offshore Voluntary Disclosure Program (OVDP)? The
following information is exactly what you need in order to help you navigate the
pros and cons of both options.
Reduced Risk of Criminal Prosecution:
As a program tailor-made for people with possible
exposure to criminal liability and/or civil penalties and who are looking to reduce
their chances of criminal prosecution due to noncompliance with U.S tax obligations,
the OVDP can reduce
the risk of criminal prosecution as long as you execute an exact and
comprehensive disclosure of all foreign records and assets.
OVDP requires a long compliance process, which
has several stages and expects a large amount of paperwork and information. This
process may take up to two years to fully complete.
The OVDP program applies a miscellaneous
offshore penalty of 27.5% of your highest foreign account balance. When
compared to the Streamline Programs, this balance can seem large.
The compliance process for the streamlined
offshore procedure is managed promptly when compared to the OVDP. Instead of
eight years of amended earnings as demanded by the OVDP,
you only have to submit three
years of amended earnings. In addition, the Streamline program only demands
the submission of six
years of missing FBARS instead of the eight
years demanded by the OVDP.
The fees for the streamlined programs are moderate when distinguished from the OVDP. Depending
on the circumstances of the taxpayer, people may apply for one of the two
Foreign Offshore Procedures, which requires the taxpayer to pay their tax and a 0% offshore fee,
or the Streamlined
Domestic Offshore Procedures which requires the taxpayer to pay a
5% fee of their highest year-end balance for the six-year agreement duration.
In addition, the assets fined in the OVDP program are not fined in the Streamline
Unlike the OVDP the streamline programs do not
offer a pathway to prevent the risk of criminal prosecution. Therefore, the IRS
can still pursue a criminal investigation even if you are enrolled in this
Looking for more information about the OVDP and the
Streamlined programs? Contact the HTG team at 720-398-6088 or visit the HTG website to discuss your situation today.