How Can OVDP and Streamlined Programs Help You with Your Tax Debt
Tax debt is a heavy burden, especially if you are an expat or having offshore accounts. The good news is, the IRS has developed two programs, OVDP and the Streamlined program, for people in similar situations that can give a much needed tax debt relief. Here’s how they can help you.
The OVDP (Offshore Voluntary Disclosure Program) provides the most painless way out if you have not declared your offshore assets in the past or you need to amend your tax returns. You will pay less penalty charges and also won’t be prosecuted, which on its own is a good enough reason to take advantage of the program. What you will need to do is:
- File up to 8 years of tax returns (or amended such)
- File up to 8 years of FBARs
- Pay the taxes you owe to date with interest and 20% penalty charge
- Pay 27.5% penalty on your highest offshore account balance.
Although the main purpose of OVDP is to deal with matters and mistakes on foreign tax returns, in reality you would be able to amend your tax returns even for issues related to your domestic accounts. So for crypto investors, this could be a good solution for amending tax returns since there’s no official amnesty program dedicated to cryptocurrencies.
The Streamlined Program
The Streamlined program may seem better than the OVDP to many. This is so because you are only required to file 3 years of tax returns and 6 FBARs instead of 8 of each. You must file as non-willful and clarify that to avoid further issues. There are also no penalties involved for U.S. persons living abroad, or 5% penalty on the highest offshore account balance for taxpayers living in the U.S.
The problem with the Streamlined program comes from the fact that it is usually connected to IRS auditing, which may be risky for some crypto investors. These audits are no childish game and the IRS goes really deep into inspecting all of your financial operations and discovering your secrets if you have such. If you fail the audit you may still face criminal prosecution. This is the very reason why we recommend regular business auditing done by tax accountants to promote transparency and prepare you for an IRS audit if you ever have to go through it.
Are you having problems with tax debt? We can help you resolve them in the best way that suits your personal situation. FAS CPA & Consultants have years of experience, we have helped hundreds of U.S. taxpayers save money from their taxes and relieve their tax debts. We’d love to help you too. Call us today or email at email@example.com and book your free consultation with one of our professional advisors.
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