IRS Statement: OVDI Deadline Extension
(Aug. 26, 2011)
Due to the potential impact of Hurricane Irene, the IRS has extended the due date for offshore voluntary disclosure initiative requests until September 9, 2011. For those taxpayers who have not yet submitted their request and any documents, the following actions are necessary by September 9, 2011:
Identifying information must 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 must be sent to:
Offshore Voluntary Disclosure Coordinator
600 Arch Street, Room 6404
Philadelphia, PA 19106.
Send a request for a 90-day extension for submitting the complete voluntary disclosure package of information to the Austin campus. This request must be sent to:
Internal Revenue Service
3651 S. I H 35 Stop 4301 AUSC
Austin, TX 78741
ATTN: 2011 Offshore Voluntary Disclosure Initiative
Jack Townsend offers this blog on Federal Tax Crimes principally for tax professionals and tax students. It is not directed to lay readers -- such as persons who are potentially subject to U.S. civil and criminal tax or related consequences. LAY READERS SHOULD READ THE PAGE IN THE RIGHT HAND COLUMN TITLE "INTENDED AUDIENCE FOR BLOG; CAUTIONARY NOTE TO LAY READERS." Thank you.
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Friday, August 26, 2011
IRS Extends OVDI Big Package Deadline Until 9/9/11 (8/26/11)
The announcement may be viewed in its full splendor here. The pertinent portions are:
22 comments:
Comments are moderated. Jack Townsend will review and approve comments only to make sure the comments are appropriate. Although comments can be made anonymously, please identify yourself (either by real name or pseudonymn) so that, over a few comments, readers will be able to better judge whether to read the comments and respond to the comments.
Could not help but think of the Big Bad Wolf telling Little Red Riding Hood: come closer my dear so that I may see you better. Then the Big Bad Wolf ate all of Little Red Riding Hood's money. At least he ate a chunk of it.
ReplyDeleteAnon123
Jack - does this increase the deadline for Disclosure under FAQ 17 for past years FBAR's as well
ReplyDelete1) I was delighted to see the 9/9 extenstion at the ovdi site. Any info on how the IRS is handling the extension request.
ReplyDeleteHas anyone got letters back about approval or disapproval. I know of one case of submission 2 weeks back and no reply, however, all the agents the person has talked to on hot line are very positive of extension being approved.
2) Also, does any one know of blogs that discuss PFIC M2M and default method details being discussed with reasonable complexity illustrated by good numerical examples. Most I have seen take extremely simple examples resulting in meaningless illustrations.
These web sites are usually lawyer websites end up inducing more fear leaving an impression as the only place to go to.
Hi All, I have 3 questions:
ReplyDelete1. I am participating in OVDI program. We were planning to apply for our US citizenship next year. Does participation in OVDI program has any impact on US citizenship application?
2. For conversion of foreign currency into USD for purposes of interest calculations, I have used the average exchange rate (using oanda website which IRS recommends) between USD & Indian rupee. Is that OK?
3. For determining the year end asset value for FBAR penalty, I have used year end exchange rates based on IRS FAQs. Is that OK?
Pls advise!
To Annon August 28, 2011 2:25 PM
ReplyDeleteRegarding your PFIC questions.
Phil Hodgen has done work on this with multiple entries...
Here is a link to all of them...
Hope this helps
http://hodgen.com/category/pfic/them..
To Annon August 28, 2011 5:25 PM
ReplyDeleteRegarding your questions... This based upon my experience in the 2009 OVDP.
1. Don't think that it will. My wife is a Green Card carrier of 30 years, and she is finally applying, and we are assuming it will not be an issue.
2. For calculating interest, etc for 1040X calculations I used Oanda too. There was no issue. I ran all calculations using two different rates. One FX from Oanda on the date a transaction happened (ie interest was posted) and a second calculation based upon a monthly average rate from IRS table. Call be dumb, but I went with the rate that consistently benefited the IRS. I was advised that either/or were acceptable, as long as I applied it consistently through out the process.
3. For the aggregate balance, I used Oanda year end FX rate. That was fine. I haven't read the OVDI applicable FAQ, but assume that is still the same as it was in the OVDP.
Hope that helps.
To Annon August 28, 2011 2:25 PM
ReplyDeleteI am familiar with Hogden's site... and they have an entirely stupid example on PFIC. which makes me doubt greatly their ability to take on job requiring the computation.
To Annon August 28, 2011 5:25 PM
Can you share who did you use for PFIC computations.
As far as currency conversion is concerned, I guess the IRS will finally use their own rate. It may not matter to the small fish but definitely will make a difference for those who have huge amounts of money to report.
ReplyDeleteTo August 29, 2011 9:27 AM
ReplyDeleteRegarding Hodgen site reference
I don't have PFICs, so haven't really paid attention to the issue.
I was just providing you a link to the only discussion I have seen on PFICs. There maybe others out there. Try Google, if you think the examples there are not helpful to your needs.
I'd like to point out that there are four events potentially subject to the new deadline of September 9:
ReplyDelete1. Request for admission to the OVDI;
2. Completion and submission of the OVDI documentation package (amended tax returns, penalty calculation, etc.), for those already accepted into the OVDI;
3. Request for extension of up to 90 days to complete and submit the documentation package;
4. Submission of back FBARs - for those taxpayers who did not have unreported foreign income; See OVDI FAQ 17.
The IRS statement about the extension is not clear on all points. It seems to cover events 1, 2 and 3 above, and should logically also apply to event 4 above. However, FAQ 24 and 25 were specifically updated to reflect the Sept. 9 date, while FAQ 17 was not. Lack of IRS clarity could cause confusion and taxpayers should be on guard not to miss a crucial deadline.
Asher it is not clear that the september 9 deadline applies for submission of complete package. A literal reading suggests that it only applies to people who are applying for pre clearance or who have not submitted their vd letters. In others words if someone submitted a complete package on September 6 would they be covered? A literal reading of the faqs and IRS press release suggests those persons have only until august 31.?
ReplyDeleteij - you have mentioned that you sent in corrections to your original package. Did you have to change the IT returns? Did you send a duplicate of the things that didn't change and only items that changed? What is the process? Thanks and good luck.
ReplyDeleteAnon of "August 29, 2011 9:11 PM",
ReplyDeleteI just sent the correted form 1040X with a letter explaining "this should replace the previous one". You only need to send those changed...
Hi All,
ReplyDeleteI got my preclearance last week. I am planning to send my ovdi letter and final package next week so that it reaches before 9/9 deadline. Is that OK?
Thanks!
Anonymous on August 29 at 6:41:
ReplyDeleteI agree, the IRS announcement is not clear.
As a practical matter, for a taxpayer who has already been accepted into the OVDI but cannot yet complete the package, an extension request can be timely submitted by Sept. 9. Thus, in your example, the taxpayer should request an extension immediately, and a Sept. 6 submission would be within the extension deadline.
In addition, yesterday the IRS added the following, concerning FBARs (my #4 above):
NOTE (Aug. 29, 2011): The IRS clarifies that the Sept. 9, 2011, extension also applies to taxpayers filing delinquent FBARs pursuant to FAQs 17 and 18.
Asher - actually the IRS also updated FAQ 11 which now clearly states that the "the terms of this initiative are available only to taxpayers who complete the voluntary disclosure process on or before September 9, 2011". Therefore, anyone who completes their package prior to September 9 is fine i.e. those that are not requesting an extension.
ReplyDeleteAnonymous on August 30 at 3:45pm:
ReplyDeleteYes, I see those updates and I agree with you.
Also, I received a pre-clearance today for a new client. The pre-clearance states that "All requirements must be completed on or before September 9, 2011. This includes both preliminary acceptance (see FAQ 24) and the filing of all paperwork as instructed (see FAQ 25)."
Asher,
ReplyDeleteCan you complete the final package by 9/9. Or will they let you request the extension through 11/30?
Jack Townsend
Jack, my understanding is that the extension request is due by September 9. This gives taxpayers up to an additional 90 days to complete the package of documents. See FAQ 25.1.
ReplyDeleteBest regards,
Asher Rubinstein
Hi Jack, Asher and all,
ReplyDeleteThanks a lot for your help on this forum. I
submitted my OVDI package last week. Without your help, it would have been really difficult. I really appreciate every one's help on this forum.
Thanks a lot.
Hi All,
ReplyDeleteI just came to know about this program. What are my options to enter the program.
Can i send the
Action 1 --> OVDI letter to Philadelphia
Action 2 --> Send a simple extension letter with no documentation attached for 90 days extension. I am not clear as the extension request process requires We list the statement of uncompleted documentation, steps taken and when to expect. My problem is , I don't have any documents ready. I fear if i send know and if they don't approve the extension i might be in soup.
Appreciate a comment from you
Hi All!
ReplyDeleteRegarding the deadline after an extension request: is the new deadline for 90 days after August 31 or for 90 days after September 9? And is it a mailing deadline or a receipt deadline?
Thank you!