For the 2014 Offshore Voluntary Disclosure Program, we recommend that the IRS:
1) Restore the previous practice of not requiring an upfront payment of the miscellaneous offshore penalty by taxpayers.
2) Apply the 50% miscellaneous “Super” penalty only to accounts held at institutions listed on the Foreign Financial Facilitators List.
3) Allow the waiver of the passive foreign investment company (PFIC) computations for small account cases.
For the Streamlined Filing Compliance Procedures, we recommend that the IRS:
1) Modify the penalty base to include only those assets associated with tax non-compliance.See the letter for more detail. I think the recommendations generally are good ones I am concerned but some of them come a little late in the implementation of these programs to be adopted after many cases have already been processed.
2) Expand the Streamlined Filing Compliance Procedures to include certain classes of nonwillful individuals who are currently ineligible for either the Streamlined Foreign Offshore Procedures (SFOP) or the Streamlined Domestic Offshore Procedures (SDOP).
3) Provide additional guidance in the SFOP and SDOP filing instructions to taxpayers on the specific factors the IRS will consider in judging whether their non-compliance was willful.
Addendum 3/11/16: I am advised that the AICPA comments overlap somewhat prior recommendations by the American Bar Association in October 2015, here.