2011 Offshore Voluntary Disclosure Initiative

Due to the potential impact of Hurricane Irene, the IRS on Aug. 26 extended the due date for offshore voluntary disclosure initiative (OVDI) requests until Sept. 9, 2011. On Aug. 29, the IRS further clarified that the Sept. 9 extension also applied to taxpayers filing delinquent FBARs pursuant to questions 17 and 18 in the questions and answers [2016 - no longer available]. 

Taxpayers seeking to participate in the OVDI needed to take the following actions by Sept. 9, 2011:

• Identifying information needed to be submitted to the Criminal Investigation office. This includes name, address, date of birth and Social Security number and as much of the other information requested in the Offshore Voluntary Disclosures Letter as possible. This information needed to be sent to:
   

Internal Revenue Service
Criminal Investigation
ATTN:  Offshore Voluntary Disclosure Coordinator
Philadelphia Lead Development Center
1-D04-100
2970 Market Street
Philadelphia, PA 19104

• A request for a 90-day extension for submitting the complete voluntary disclosure package of information to the Austin campus could be submitted. This request needed to be sent to:

Internal Revenue Service
3651 S. I H 35 Stop 4301 AUSC
Austin, TX 78741
ATTN: 2011 Offshore Voluntary Disclosure Initiative

The questions and answers were updated as follows:

Q24.1: What if I cannot complete my Offshore Voluntary Disclosures Letter and send it to CI on or before the deadline?

A 24.1 In order to participate and be eligible for the 2011 OVDI, a taxpayer must submit their name, address, date of birth and Social Security number and should submit as much of the other information on the three-page Offshore Voluntary Disclosures Letter as possible on or before Sept. 9, 2011. An incomplete Offshore Voluntary Disclosures Letter must be amended (with the addition of any missing information) and submitted as quickly as possible.

Revised Q 25.1: What if I cannot make a complete submission on or before the deadline?

Revised A 25.1: A taxpayer may request an extension of the deadline to complete his or her submission. Taxpayers requesting extensions must submit their name, address, date of birth and Social Security number and should submit as much of the information described in FAQ 25 as possible with their written request for extension.  

Requests for up to a 90-day extension must include a statement of those items that are missing, the reasons why they are not included, and the steps taken to secure them.  Requests for extensions must be made in writing and sent to the Austin Campus on or before Sept. 9, 2011 to:
 

Internal Revenue Service
3651 S. I H 35 Stop 4301 AUSC
Austin, TX 78741
ATTN: 2011 Offshore Voluntary Disclosure Initiative

Original Deadline

The IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative in order to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available only through Aug. 31, 2011. However, taxpayers who made a good faith effort to comply may be eligible for an extension, detailed in Q&A 25.1 in the revised questions and answers [2016 - no longer available].

The 2011 initiative has a higher penalty rate than the IRS’s previous voluntary disclosure program, which ended on Oct. 15, 2009, but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk IRS detection and possible criminal prosecution. In addition, the 2011 initiative includes new guidelines to provide fairness to people with smaller amounts of undisclosed assets or unusual situations.

For general details on the 2011 initiative, see news releases IR-2011-84, IRS Reminds Taxpayers that the Aug. 31 Deadline Is Fast Approaching for the Second Special Voluntary Disclosure Initiative of Offshore Accounts, and IR-2011-14, Second Special Voluntary Disclosure Initiative Opens; Those Hiding Assets Offshore Face Aug. 31 deadline.

The IRS has also made available the 2011 OVDI information in eight foreign languages for those taxpayers with undisclosed offshore accounts. The agency took this step to reach taxpayers whose primary language may not be English. See news release IR-2011-25, IRS Issues Information on 2011 Offshore Voluntary Disclosure Initiative in Eight Foreign Languages.

Information for Tax Professionals, Participants

Further details about this initiative are provided in a series of questions and answers (revised June 2, 2011) [2016 - no longer available].

Several documents are needed to participate in the initiative.

How to Participate

Taxpayers and tax practitioners interested in the new voluntary disclosure initiative can get complete details in the questions and answers [2016 - no longer available] and How to Make a Voluntary Disclosure.

More Information

Additional details on the 2011 initiative, including contact points, mailing addresses, and OVDI deadlines are available on this web site.

Related Items:

• Field Directive Memorandum PDF: Authorization to Apply Penalty Framework to Voluntary Disclosure Requests with Offshore Issues
• Details on the traditional IRS Voluntary Disclosure Program outside of the 2011 initiative.
• Information on the original 2009 Offshore Voluntary Disclosure Program ending on Oct. 15, 2009.
• Memorandum and guidance regarding the steps to be taken before and after a taxpayer opts out PDF or is removed from the civil settlement structure of the 2009 OVDP or the 2011 OVDI.
• 2011 Offshore Voluntary Disclosure Program Frequently Asked Questions and Answers