Reduced Risk of Criminal Prosecution:
As a program specifically designed for people
with potential exposure to criminal liability and/or civil penalties and who
are looking to avoid criminal prosecution due to unreported overseas income,
the OVDP can reduce
the risk of criminal prosecution as long as you make an honest and complete disclosure of all
foreign accounts and assets.
OVDP requires a very long submission process
that has multiple phases and requires a lot of paperwork and information. This
process may take 6
months to more than 2 years to 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 is can seem rather high.
The submission process for the streamlined
offshore procedure is handled swiftly when compared to the OVDP. You must
years of amended returns instead of the eight years of amended returns
required by the OVDP.
In addition, you only have to submit six
years of FBARS rather than eight
The penalties for the streamlined programs are light when compared to OVDP. Depending on
the circumstances of the taxpayer, they can apply for one of the two programs: Streamlined
Foreign Offshore Procedures where the taxpayer pays their tax
and a 0% offshore penalty, and the Streamlined
Domestic Offshore Procedures where the taxpayer pays a 5% penalty of
their highest year-end balance for the six-year compliance period. In addition,
the assets penalized under the OVDP program are not penalized in the Streamline
Unlike the OVDP, which provides taxpayers with
unreported foreign accounts and assets the opportunity to avert criminal
prosecution, streamline programs do not offer a pathway to avoid criminal
prosecution. Therefore, the IRS can still pursue a criminal investigation even
if you are enrolled in this program.
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.