34 thoughts on “From Moodys LLP: Breaking news!! IRS releases details of new procedures for non-compliant taxpayers living abroad”

1. @Lisa

   I haven’t come across where the guidelines mention that OVD participants are excluded. Can you direct me? One always has the option of opting out of OVDI.

   Can someone define what the IRS considers ‘sophisticated tax planning’? It’s speculated elsewhere that the evidence of sophisticated tax planning rises with the financial assets of an individual tax payer, but regardless of these assets, isn’t it evidence that no sophisticated tax planning was done when a taxpayer neglected to file FBARS and private letter rulings?As I said before, this program only helps those who don’t have what the IRS wants, which is a source of revenue. 

2. Here is what the IRS says about the New Streamlined procedures to allow non-resident U.S. persons to come into compliance.

   http://www.irs.gov/uac/Instructions-for-New-Streamlined-Filing-Compliance-Procedures-for-Non-Resident-Non-Filer-US-Taxpayers

   There is a link on this page to the all important questionaire

   Also, if you are interested my take on this:

   http://renounceuscitizenship.wordpress.com/2012/09/01/new-filing-compliance-procedures-for-non-resident-u-s-taxpayers-effective-september-1-2012/

3. @bubblebustin, renounce and Eric,

   Thank you!  I have updated the links in the post to arrive at the correct IRS “new instructions”.

4. @ bubblebustin,

   Above, Roy Berg has said he will have More (analysis) to follow this weekend. Renounce has a good take on these new instructions as well: http://renounceuscitizenship.wordpress.com/2012/09/01/new-filing-compliance-procedures-for-non-resident-u-s-taxpayers-effective-september-1-2012/

   From “Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers”

   Eligibility
   This procedure is available for non-resident U.S. taxpayers who have resided outside of the U.S. since January 1, 2009 and who have not filed a U.S. tax return during the same period. These taxpayers must present a low level of compliance risk as described below
   Amended returns submitted through this program will be treated as high risk returns and subject to examination, except for those filed for the sole purpose of submitting late-filed Forms 8891 to seek relief for failure to timely elect deferral of income from certain retirement or savings plans where deferral is permitted by relevant treaty. It should be noted that this relief is also available under the Offshore Voluntary Disclosure Program. See below for the information required to be submitted with such requests. (If you need to file an amended return to correct previously reported or unreported income, deductions, credits, tax etc, you should not use this streamlined procedure. Depending on your circumstances, you may want to consider participating in the Offshore Voluntary Disclosure Program.)All tax returns submitted under this procedure must have a valid Taxpayer Identification Number (TIN). For U.S. citizens, a TIN is a Social Security Number (SSN). For individuals that are not eligible for an SSN, an Individual Taxpayer Identification Number (ITIN) is a valid TIN. Tax returns filed without a valid SSN or ITIN will not be processed. For those who are ineligible for an SSN, but who do not have an ITIN, a submission may be made through this program if accompanied by a complete ITIN application. For information on obtaining an SSN, see http://www.ssa.gov. For information on obtaining an ITIN, see the ITIN page.

5. *UPSET.  No they won’t. They have enough to worry about.

6. Pingback: The Isaac Brock Society - New Filing Compliance Procedures for Non-Resident U.S. Taxpayers – Effective September 1, 2012 – A Preliminary Analysis

7. IRS and Practitioners Comment on Streamlined OVDI Procedure 

   Taxpayers who do not necessarily meet all the factors under the IRS’s streamlined filing compliance procedures for previously unreported offshore accounts should nonetheless apply to the program if they are low-risk account holders, senior IRS officials said December 6. 

8. ??

   @Just Me, this is getting ever more confusing – so in this article, are they calling the ‘streamlined compliance procedure‘ a form of ‘streamlined’ OVDI?

   The title says “Streamlined OVDI Procedure”.

   I don’t get it. I thought that the OVDI was supposed to be for those with more criminal rather than civil risk (though many who entered didn’t know that, or were aware of the distinctions). In contrast, I thought that the ‘Streamlined’ procedure  “…was meant as a way to
   allow low-risk, noncompliant account holders to come clean to the
   government”.

   So, now is the streamlined procedure supposed to be connected to the OVDI and OVDP in some way? What happens to the ‘low-risk’ minnow people who got into the OVDI/Ps through bad practitioner advice or panic at IRS threats, and ‘trying to do the right thing’ as the IRS told them to do. Is this a way of allowing the low-risk people stuck in the OVD to move into the low-risk process, or to apply to it, as well as to let new people coming forward have a path that is less rigid than the OVD programs?

9. @badger

   I wouldn’t get too hung up on it.  I think that is just the semantics that Jack Townsend used (mistakenly)  in the title, or took from something he read on Tax Notes, which I do not have a subscription to.  On the IRS web site they do not use the same term.  They just called it a Streamlined process.   And, by the way, the IRS has gone back to the old description, OVDP now, yet again, for the process after january 9, 2012. 🙂