Tips for Participating in the Offshore Voluntary Disclosure Initiative

June 27, 2011 Posted by OVDI

The IRS has created the Offshore Voluntary Disclosure Initiative to allow anyone who has offshore banking activity to come on their own to disclose it to the IRS and to pay taxes and penalties on it. Not participating in the Initiative could result in thousands of dollars in penalties alone and criminal charges being filed leaving you a felon. It is better to go through with voluntary disclosure than to come under the IRS’s close examination process.

Here are five tips to help you smoothly go through the Offshore Voluntary Disclosure Initiative and avoid high penalties and criminal charges:

  1. Honesty – Always be honest with the IRS. Lying to them never works. It only gets you into even more trouble with them. You can start by actually participating in the voluntary disclosure Initiative. This tells the IRS that you are not deliberately running from them or hiding your financial activity from them. Fill out all the forms correctly without tossing numbers down just to fill out the form and get it filed in time.

If at any time the IRS thinks that you are being evasive or not completely truthful with them, the examination of your records will become much more intense. You don’t want this kind of stress in your life. Make it easier with the truth. Having the IRS crawling around your records in such depth will be extremely messy and will be a long lesson to be learned.

  1. Organized – You should have all your financial records organized and ready to be gone through. As you fill out the forms that are part of the IRS voluntary disclosure, pull straight from your records like you do with your yearly 1040 return. You will need all the information on your financial offshore transactions.


If you have an accountant that handles them for you, they should be able to provide all the information in a summarized format that can help you fill out all the forms. If you don’t have an accountant, you might want to hire one to help you get everything organized in a manner that makes the process smoother. You won’t regret that move.


  1. Timely – The IRS has a deadline each year for the participation in the Offshore Voluntary Disclosure Initiative. This is a set time and there is no extension. Don’t confuse this with the yearly tax returns that you file by April 15th which does allow extensions. This one is a one shot deal. You will come under strict scrutiny of the IRS and the penalties will be more than you could possibly imagine. Criminal charges could also be included after the IRS goes through all your records. This is one deadline that you can’t afford to miss. As the IRS announces the tax year deadlines, mark it on your calendar and start preparing to meet it.


  1. Work With Them – Keep a humble attitude and work with the IRS. Answer their questions honestly. Be timely in giving them information. Be accommodating. Any tension that you exhibit or resentment of their questions could have them looking closer at your financial books to see if you are trying to hide anything. Experts always suggest working with the IRS instead of against them. It always works out better for you.

They do not want to put you away. They are just trying to get all the information they need and have everything reported correctly. Work against them and it makes the whole process so much more painful.

  1. Seek Expert Advice – It is not always easy to understand what is required for the Offshore Voluntary Disclosure Initiative. This is especially true when you are new to it. The names of the forms can be mind-boggling. The stress of knowing what will happen if it is not done right can almost drive you to madness. It can also be unnerving when you feel like something is wrong and you might be asked to pay too much.


When that happens, you don’t have to face it alone. is the place to come if you want expert help. What does have to offer you?


  • Experts – They know their stuff.
  • Experience – They are not fresh out of college. They have experience with taxes, offshore accounts, and the IRS.
  • Confidentiality – They respect your privacy.
  • Results – All of this combined, gives you results.

Avoiding the Offshore Voluntary Disclosure Initiative

June 27, 2011 Posted by OVDI

If you have offshore financial activity, the Internal Revenue Service (IRS) asks that you come forward with voluntary disclosure of this information. Taxes are required to be paid on the activity and coming to the IRS voluntarily eases much of the pain on both sides to get the taxes paid and the matter closed. This is done through the Offshore Voluntary Disclosure Initiative that the IRS offers each year. Yet, many choose to not participate with dire consequences once the IRS begins to examine them.

Detailed Examination

Whether you participate in the Offshore Voluntary Disclosure Initiative or not, you will have your offshore financial activity looked at. The difference is how the IRS approaches it. It can be extremely in depth when you try to avoid letting the IRS know of your financial activity.

Stepping forward and filling out all the paperwork for the voluntary disclosure Initiative gives the appearance of not hiding something or avoiding the IRS. You initiate the disclosure and the examination is much easier. The IRS does not start the process with the mindset that you are avoiding taxes. They see you as working with them. This makes working with the IRS much easier as they like voluntary disclosure.

If you avoid the IRS voluntary disclosure and don’t take advantage of this opportunity that they are giving you, then you give the appearance of hiding from the IRS. This causes you to fall under their microscope which has a very high magnification. If they think you are hiding things, they will dig deeper and question transactions more closely. Basically, you will be audited and it will not be an easy one.

The IRS will expect you to have all your paperwork together and be prepared to answer all questions. It would have been much better to go through the Offshore Voluntary Disclosure Initiative and much less painful.

Extremely High Penalties

Yes, you will have to pay the IRS even if you go through the voluntary disclosure Initiative. Benjamin Franklin assured us that taxes can’t be avoided just as death can’t be. They have to be paid, but what you have to pay if you don’t come forward on your own will amaze you if not make you sick to your stomach.

Not filing a TD F 90-22 could result with a minimum of $10,000 being applied against you. Other forms not filed could result in $50,000 and $100,000 being charged. This is per violation and not just a flat fee.  Miss more than one form and you have a number that grows by leaps and bounds. Add all these up and you could be in debt to the IRS for hundreds of thousands of dollars. Compare this to the taxes you would have paid under the Offshore Voluntary Disclosure Initiative. They would have been a small fraction of these extremely high amounts.


Criminal Charges

You could be faced with criminal charges if you do not file a return or even file a false one. Avoiding the voluntary disclosure Initiative could have you charged with tax evasion. This could give you five years in prison in addition to more penalties. It begins to add up quickly.

File a false return and get three years. Don’t file a return and get at least one year in prison. The IRS doesn’t take these things lightly. All these criminal charges also come with monetary fines.

Not participating in the voluntary disclosure Initiative has high chances of you becoming a felon. This is one gamble no one should really take. Having a felony on your record can change your life and not for the better. So much will be at arm’s length to you once you have been convicted as a felon.

Needing Help

If you do find yourself in a situation where you avoided the chance the IRS gave you through the Offshore Voluntary Disclosure Initiative, you don’t want to face it alone. You want expert help that knows the process and has experience working with the IRS. You can find that at where confidentiality and experience is important.

Never feel like you have to face the IRS by yourself. Get the expert help that offers. They can offer you the advice you need.

Participation in the Offshore Voluntary Disclosure Program

June 27, 2011 Posted by OVDI

The IRS has created the Offshore Voluntary Disclosure Initiative for all taxpayers who have offshore accounts. It allows them to report to the Internal Revenue Service (IRS) financial activity and pay the appropriate fees without having to face high penalties and criminal charges. If you have any offshore activity, then you are asked to participate in the Offshore Voluntary Disclosure Initiative. Not participating and falling under the examination of the IRS will result in $100,000s of penalties and possible jail time. Participating is much easier on you as a taxpayer.

How do you participate in the Offshore Voluntary Disclosure Initiative?

Step 1 – Know Your Offshore Financial Activity

When you complete you regular IRS reporting for your personal and business activities, you have to know the details of your financial life. You usually end up with piles of paperwork showing income, another showing expenses, and others showing deductions. The same is to be said for your offshore financial activity. You need to have all your paperwork in order and ready to report. This includes all balances, income, expenses, and other transactions that the IRS forms will ask for.

Never guess! This can lead you to more trouble in the end as it can be viewed as criminal activity. Be completely honest and accurate. Have paperwork to support everything you declare in the Offshore Voluntary Disclosure Initiative. Never face the IRS with guesses. They frown upon that. If you do have to make an estimate, have documentation on how you came up with it. If it is acceptable to the IRS, you are fine.

Step 2 – Fill Out Appropriate IRS Reporting Forms

When the Offshore Voluntary Disclosure Initiative was developed, the IRS created forms specifically for those that stepped forward for voluntary disclosure. These include an amended 1040 return (1040X) and a TD F 90-22. The 1040X return might include various schedules such as B, C, or D that will have to be amended and filed, also.

These need to be filed by the Offshore Voluntary Disclosure Initiative deadline set by the IRS at the start of each tax season. Failure to meet this deadline will eliminate your participation in the Initiative which means more penalties and a higher chance of criminal charges being filed against you.

If you know that you are eligible for the Offshore Voluntary Disclosure Initiative, don’t wait until the deadline to get everything together and filed. Do it as early as you can.

Step 3 – Pay Fees and/or Penalties

You will not be able to avoid paying the IRS even by participating in the Offshore Voluntary Disclosure Initiative. Why? Because reporting of the offshore income was not done throughout the year as your other activity is done. Also, you will have filed your regular tax return without this information which means that taxes were not paid on it.

Don’t be surprised that you will owe money to the IRS. It is just a matter of how much.

Step 4 – Sign Voluntary Disclosure Agreement

When all is said and done, the Offshore Voluntary Disclosure Initiative ends with you signing a voluntary disclosure agreement which both sides are in agreement to the results of the Initiative and that all fees and penalties have been paid.

What to Do When Faced With Problems

Overall, the Offshore Voluntary Disclosure Initiative appears to be an easy process though it is time consuming. Yet, not everything is as easy as it appears and problems do arise. It was designed to help the taxpayer, but that did not mean that it was always clear to understand and follow.

Yes, voluntary disclosure makes it easier. But you might not understand the whole process of the Offshore Voluntary Disclosure Initiative, questions the IRS is asking, or why your IRS bill is so high. That is when you need help, and you need experienced help. is a great place to help clear up those problems that you face when you go through the Offshore Voluntary Disclosure Initiative. With tax experts behind every consultation, you find answers to your questions, support for the process, ability to negotiate with the IRS, understand the voluntary disclosure agreement, and people who know what they are talking about.

Don’t let the Offshore Voluntary Disclosure Initiative scare you. It is there to help you report correctly to the IRS your offshore activity. Let help you through it with their experienced staff.

The Purpose of the Offshore Voluntary Disclosure Initiative

June 27, 2011 Posted by OVDI

IRS Scrutiny

The loss of revenue with no one deciding to give voluntary disclosure along with the difficulty in capturing illegal activities brought offshore banking under the direct eye of the IRS. The argument was that taxpayers were hiding money. This doesn’t sit well with the IRS. The agency began to look closely at those taxpayers that held offshore accounts. Penalties and even jail time were being dealt out. The problem was that many people were feeling the pain of the IRS while declaring that they would have willing paid their taxes if the IRS had only told them they had to.

Thus, the IRS created the Offshore Voluntary Disclosure Initiative.

Anyone who has offshore banking activity is directly affected by the Offshore Voluntary Disclosure Initiative. Many people question as to why the Internal Revenue Service (IRS) is going after offshore account holders and also why the Initiative was created. Though the accounts are not located within the United States, the taxpayers are citizens and are required to report all financial activity.

To understand the purpose of this Initiative, you have to first understand the history behind offshore banking.

Origins of Offshore Banking

The original intent of offshore banking was to avoid paying what many considered to be excessively high taxes. They wanted a way to protect their money. This also opened the door for those that had money from illegal activities to hide their assets from authorities. Standards of confidentiality by the offshore banks made this a very appealing method of securing funds while getting a very nice interest rate.

The result was a huge loss of revenue for many countries and complications in capturing many criminals. More and more people were looking to these offshore banks and voluntary disclosure of these accounts was not happening. Officials could not avoid this topic for too much longer.

Creation of Offshore Voluntary Disclosure Initiative

One might think that the Offshore Voluntary Disclosure Initiative was another way for the IRS to get money and control offshore banking. In truth, it was created to help the taxpayer out.

The lure of great interest rates caused many to look to offshore banking. They were not out to avoid taxes or to hide illegal activity. They were conducting legitimate transactions. Yet, they were getting caught up in the IRS examination of offshore banking and were paying the same price as those that were using the offshore accounts to avoid authorities. Their voices were eventually heard by the IRS.

By creating the Offshore Voluntary Disclosure Initiative, the IRS was giving all the taxpayers to come forth on their own to report all offshore financial activity. Though the taxpayers still had to pay, the results were nothing compared to not participating in the Initiative. They were able to avoid hundreds of thousands of dollars in fees and penalties and from being placed behind bars.

The Offshore Voluntary Disclosure Initiative saved the IRS time and resources while helping the taxpayer fulfill their tax obligation. Otherwise, the IRS was spending tons of manpower searching out the ones that had offshore accounts and examining them. This could take years. In fact, the creation of the Offshore Voluntary Disclosure Initiative gave the IRS more time to spend on finding the ones who were actually conducting illegal activities.

Getting Help with the Offshore Voluntary Disclosure Initiative

The Offshore Voluntary Disclosure Initiative involves a lot of paperwork and a lot of questions. Even after completing the whole process and signing the voluntary disclosure agreement you might be faced with a bill from the IRS that is way too large for you to handle. You might even be faced with possible criminal charges. The need for help could come at anytime and is not something to be taken lightly.

The experts at Tax Relief can help you no matter what stage of the process you are in. They understand the Offshore Voluntary Disclosure Initiative thoroughly and have years of experience working with the IRS. Questions about the voluntary disclosure are answered quickly. Help with negotiating lower penalties is waiting for you at

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Remember that the IRS created the Offshore Disclosure Initiative to help the taxpayer meet their tax debt easily and without criminal charges. It is not a punishment, but a way to assist you in getting it all done. Don’t avoid it. Work with the IRS and contact with any help you need in getting it done right.