Former Offshore Voluntary Disclosure Program Participants and Expats Targeted in IRS Compliance Campaigns

On July 19, 2019, the IRS Large Business and International Division (LB&I) announced six newly approved compliance campaigns. In the Announcement, the IRS clarified that it identified the campaigns "through LB&I data analysis and suggestions from IRS employees." One of these campaigns, Post OVDP Compliance, targets taxpayers who previously went through the Offshore Voluntary Disclosure Program (OVDP). While another campaign, Expatriation, is aimed at U.S. citizens and long-term residents who expatriated on or after June 17, 2008.1

Versions of the OVDP date back to 2009, but the program closed in September of 2018. Recall that the OVDP enabled US taxpayers, who had willfully failed to disclose foreign assets, to become compliant with US tax laws, while avoiding substantial penalties and almost eliminating the risk of criminal prosecution. Per the Announcement, these former OVDP participants risk ongoing IRS scrutiny:

This campaign addresses tax noncompliance related to former Offshore Voluntary Disclosure Program (OVDP) taxpayers' failure to remain compliant with their foreign income and asset reporting requirements. The IRS will address tax noncompliance through soft letters and examinations.

Similarly, certain expatriates are also the focus of an IRS compliance campaign. Apparently, the IRS believes it has sufficient information to announce:

U.S. citizens and long-term residents (lawful permanent residents in eight out of the last 15 taxable years) who expatriated on or after June 17, 2008, may not have met their filing requirements or tax obligations. The Internal Revenue Service will address noncompliance through a variety of treatment streams, including outreach, soft letters, and examination.

Taxpayers fitting the profile of either campaign described above should understand that IRS campaigns such as these are a result of the IRS's decision to prioritize these areas as particular compliance risks. Targeted taxpayers should consider proactive measures such as reviewing their positions and documents with an experienced tax professional.

If you have concerns or questions about your position as a former OVDP participant or expatriate, contact Frost & Associates, LLC today at 410-497-5947.

1 LB&I Compliance Campaign: IRS Large Business and International Division (LB&I) Announces the Approval of Six Additional Compliance Campaigns (July 19, 2019).

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