The article is short and worth reading in its entirety. Some excerpts:
"The second voluntary initiative gives people a fair way to resolve their tax problems," IRS Commissioner Douglas Shulman said August 8 in a reminder that the 2011 OVDI is ending.
Not all practitioners agree. The standardized penalty structure of the OVDP and OVDI "has led to some incredibly disproportionate and painful results," said Michel.
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The program's inability to differentiate between taxpayers' conduct and their culpability is frustrating, said Jeffrey A. Neiman, who led the prosecution of Swiss bank UBS as an assistant U.S. attorney in the Southern District of Florida. "If the OVDI program were more fair for these taxpayers who were not acting willfully, you would not have an issue with quiet disclosures or opting out, and you would probably have more compliance as well," he said.
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James N. Mastracchio, a partner and chair of the tax controversy practice at Baker & Hostetler LLP, said that although the opt-out procedure was still in its early stages, he has talked with agents about the facts of his clients' cases in an attempt to reach an agreement. Sometimes the agents even interviewed taxpayers who wanted to opt out, he said, adding that approach has helped to remove some of the uncertainty from the process.
Mastracchio said that in opt-out cases in which taxpayers have been able to reach agreements with the agents as to what the settlement amount should be outside the OVDP, the process has been smooth. He said it starts with a letter from the taxpayer with a proposed settlement. If the agent agrees with the assessment, the agent writes a recommendation, and the file goes up for review.
"Those cases have been returned quickly to the agent, and we've been able to resolve those cases," Mastracchio said. However, when there is a disagreement over what the taxpayer and the agent consider an appropriate settlement, the process has stalled, he said.