On March 13, 2018, the IRS announced that it will end the Offshore Voluntary Disclosure Program ("OVDP") on September 28, 2018. The OVDP, allows taxpayers to voluntarily disclose foreign financial assets and avoid potential criminal liability. In its news release, the IRS stated that taxpayers are being alerted now so that those taxpayers with undisclosed foreign assets who are interested in making a disclosure through the OVDP will still have an opportunity to do so. Taxpayers who have unreported foreign accounts may still be able to pursue the Streamlined Filing Compliance Procedures program. However, that program is only available for taxpayers who were not aware of their filing obligations related to foreign accounts.
The end of the OVDP should not come as a surprise to taxpayers as the program was never intended as a permanent option for taxpayers with undisclosed foreign assets. Acting IRS Commissioner David Kautter echoed this sentiment, stating in the IRS news release that "[t]axpayers have had several years to come into compliance with U.S. tax laws under this program” and that “[a]ll along, we have been clear that we would close the program at the appropriate time…." The IRS also noted that after the OVDP closes on September 28, 2018, it will continue to use tools such as taxpayer education, whistleblower leads, civil examination and criminal prosecution to combat offshore tax avoidance.
The window is closing on taxpayers with undisclosed foreign assets and taxpayers should act quickly to take advantage of the OVDP. While the Streamlined Filing Compliance Procedures often results in a more favorable outcome to taxpayers disclosing foreign assets, not all taxpayers qualified for the streamlined program. With the OVDP closing, taxpayers with undisclosed foreign assets will have one less option available to come into compliance with their U.S. tax reporting obligations.
The tax planning attorneys at McLaughlinQuinn LLC regularly represent clients in filing voluntary disclosures for foreign accounts through both the OVDP and streamlined programs. For more information on this newsletter and McLaughlinQuinn LLC’s tax planning practice, contact Cory J. Bilodeau, Esq.., Tax Planning Partner, at (401) 655-2203 or via email at
