Everything You Need To Know About the Offshore Voluntary Disclosure Program Deadline
Are you a US citizen living in Canada?
Have you been regularly filing your US income taxes? If not, then September 28th is a very important date for you. The US Offshore Voluntary Disclosure Program (OVDP) is about to end, and it has very real consequences for many Americans living outside of the country.
Read below to find out the most important details you need to know about what OVDP is, the ways you might be affected, and how the US tax accountants at Facet Advisors can help you before the deadline passes.
What You Need to Know
For 10 years, OVDP has been in place to support US citizens who have not been compliant with their US income tax and Foreign Bank Account Report (FBAR). Its purpose is to allow individuals and businesses to come forward and avoid civil penalties and/or criminal prosecution. As a type of tax amnesty, over the last decade OVDP has helped countless US citizens avoid the serious consequences of non-compliance.
But on September 28th, 2018 — that is all about to change, and you could be seriously affected. To learn more, we recommend visiting the IRS FAQ page about OVDP.
How Do I Know if I’m Affected?
Are you a US citizen living outside of the United States? Then this affects you.
US citizens living outside of the United States still have to file and pay US tax — and it’s not as simple as you may think. Many people who no longer reside in the United States, or who spend prolonged periods of time away, might be (knowingly or not) evading their taxes. For example, in some cases there are people who have never lived in the United States, but their parents are US citizens. People like this may not even realize they to may be a citizen and subject to US tax rules.
The best way to know is to start asking the questions now, and consult with on of our US tax accountants as soon as possible. With Labour day weekend not too far away, this is your last chance to get ahead of the busy season and ensure you don’t miss this important deadline.
Why You Should Care
In short, the civil penalties alone should be severe enough reason to make you take action right away. Add on to that the severe criminal charges that could occur, the consequences are extraordinary and not worth the risk of waiting.
Quoting directly from the IRS website, here is an idea of the civil penalties for failing to file FBARs:
The civil penalty for willfully failing to file an FBAR can be as high as the greater of $100,000 or 50 percent of the total balance of the foreign financial account per violation.
Non-willful violations that the IRS determines were not due to reasonable cause are subject to a $10,000 penalty per violation.
And that’s just one clause, of many more clauses that contain serious financial ramifications for people who fail to file.
Then, in the more extreme cases, there are a handful of even scarier criminal prosecutions that can be pursued:
A person convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000.
Filing a false return subjects a person to a prison term of up to three years and a fine of up to $250,000.
A person who fails to file a tax return is subject to a prison term of up to one year and a fine of up to $100,000.
Failing to file an FBAR subjects a person to a prison term of up to ten years and criminal penalties of up to $500,000.
A person convicted of conspiracy to defraud the government with respect to claims is subject to a prison term of up to not more than 10 years or a fine of up to $250,000.
A person convicted of conspiracy to commit offense or to defraud the United States is subject to a prison term of not more than five years and a fine of up to $250,000.
But the good news is, it’s not too late. And you can avoid this headache by taking the right steps now to make sure you are safe and compliant.
Speak With One of Our US Tax Accountants, NOW
Luckily, expertise is accessible to you and it’s not too late to get started with steps towards becoming compliant. The most important thing you can do is talk to a tax accountant who specialises in cross border taxation.
As experienced US tax accountants in Vancouver, Facet knows the ins and outs of meeting IRS requirements. When it comes to helping you with OVDP and FBAR, we will walk you through each step and ensure you are 100% compliant by the September deadline.
Every situation is different, and there is no one size fits all for everyone. So connect with Facet Advisors today and let’s get started on a plan that works for you. Set up a consultation with one out our certified US tax accountants and we will can take care of the rest — so you can rest easy in the months ahead.
First Time Hearing About Facet Advisors?
Welcome! We’re happy you found us, here’s a little more about us so you can get to know us better.
Established in 1998, Facet is a team of Chartered Professional Accountants in Vancouver and Langley that support local, national and international businesses and individuals with services in Audit, Business Consulting, Succession Planning, Corporate Tax Planning, US Tax Services and Personal Taxation. In particular, Facet is a full-service accountancy and business advisory firm, helping clients structure their affairs in Canada, the US and internationally. To learn more, please + 1 (604) 534-3004