OVDP: Pros: Reduced Risk of Criminal Prosecution:· As a program specifically designed for peoplewith potential exposure to criminal liability and/or civil penalties and whoare looking to avoid criminal prosecution due to unreported overseas income,the OVDP can reducethe risk of criminal prosecution as long as you make an honest and complete disclosure of allforeign accounts and assets. Cons: Lengthy Process: · OVDP requires a very long submission processthat has multiple phases and requires a lot of paperwork and information. Thisprocess may take 6months to more than 2 years to complete. Increased Penalties:· The OVDP program applies a miscellaneousoffshore penalty of 27.5% of your highest foreign account balance.
Whencompared to the Streamline Programs, this balance is can seem rather high. Streamlined Programs: Pros: Faster Process· The submission process for the streamlinedoffshore procedure is handled swiftly when compared to the OVDP. You mustsubmit threeyears of amended returns instead of the eight years of amended returnsrequired by the OVDP.In addition, you only have to submit sixyears of FBARS rather than eightyears.
Fewer Penalties:· The penalties for the streamlined programs are light when compared to OVDP. Depending onthe circumstances of the taxpayer, they can apply for one of the two programs: StreamlinedForeign Offshore Procedures where the taxpayer pays their taxand a 0% offshore penalty, and the StreamlinedDomestic Offshore Procedures where the taxpayer pays a 5% penalty oftheir highest year-end balance for the six-year compliance period. In addition,the assets penalized under the OVDP program are not penalized in the StreamlineProgram. Cons: Criminal Prosecution:· Unlike the OVDP, which provides taxpayers withunreported foreign accounts and assets the opportunity to avert criminalprosecution, streamline programs do not offer a pathway to avoid criminalprosecution.
Therefore, the IRS can still pursue a criminal investigation evenif you are enrolled in this program. Looking for more information about the OVDP and theStreamlined programs? Contact the HTG team at 720-398-6088 or visit the HTG website to discuss your situation today.