Offshore Voluntary Disclosure Program

Last updated on May 1, 2013

In June 2012, the IRS announced that its Offshore Voluntary Disclosure Programs (OVDP) recovered more than $5 billion in hidden tax money from overseas accounts. In April 2013, government investigators stated the IRS collected more than $5.5 billion under a series of OVDP programs. The success of OVDP is apparent.

Under OVDP, taxpayers with hidden assets overseas can get into compliance with the US tax laws by disclosing their assets in foreign financial institutions without the risk of heavy penalties or imprisonment.

As it is becoming increasingly difficult for taxpayers to hide money in overseas banks, taxpayers are using the OVDP to safely get into compliance without punishment. The IRS previously opened and closed many OVDPs. The current program began in January 2012. However, the 2012 OVDP has a higher penalty rate than previous programs.

IRS Commissioner Doug Shulman said, “We continue to make strong progress in our international compliance efforts that help ensure honest taxpayers are not footing the bill for those hiding assets offshore. People are finding it tougher and tougher to keep their assets hidden in offshore accounts.”

The IRS has also been working to close loopholes some taxpayers exploit to hide assets overseas. Under the rules of the program, the IRS can close the current OVDP at anytime.