As, rightly, suggested by badger for a dedicated post at Isaac Brock:
and latest comment,
Jack – Good news! I am an OVDI participant who asked to opt out into the Streamlined Program. I have been accepted into the Streamlined Program as a low risk for non-compliance. I have been issued Letter 5062 (acceptance into Streamlined Program) along with a 4549 (tax adjustments – no tax penalties, just interest) and my agent told me today that a Letter 3800 (FBAR Warning) will soon follow.
There is major news associated with this result. It is news that OVDI participants and many tax attorneys will want to know. The news is that the Streamlined Program policy is changing again. It is very much to the favor of OVDI participants. It seems that they are being given the chance to enter the Streamlined Program on the basis of the same years as new Streamlined Program participants. I am a prime example of that. I was a filer who amended returns in OVDI. I thought amending returns made me ineligible for the Streamlined Program. It no longer does. Even Letter 5062 says, “We’ve processed the returns or amended returns you submitted.”
Because I started in the Voluntary Disclosure System before OVDI existed, I first filed 2009 as part of OVDI. According to an IRSTechnical Adviser, they are only looking at 2009 as a criteria. If the
OVDI participant did not file in 2009, that fulfills the conditions of the Streamlined Program. Previous filed years do not come into question for Streamlined Program eligibility if an OVDI participant wants to opt out into the Streamlined Program. That makes sense as these years are all closed anyway if one was a filer and did not have a major reporting discrepancy.
OVDI participants will still be expected to pay any tax if they have open years before 2009. As OVDI participants had to file 2010 and 2011 as part of OVDI, these years do not affect eligibility of the OVDI participant for the Streamlined Program.
The rule appears to be a new approach in the IRS. My agent was not aware of the rule and initially told me my application would be rejected for the Streamlined Program. However, the Taxpayer Advocate has been involved in my case for more than one year and has been monitoring the many different issues I have had to face. When I reported my rejection from the Streamlined Program to the TAS, they insisted that along with allowing amounts higher than $1500, it was also okay to have amended returns. They had the Technical Adviser they are working with in the IRS contact my agent and explain this new policy. My agent said that the policy is little known and needs to be better communicated within the IRS. Lawyers who wish to verify what I say can contact the Sr. Attorney Adviser to Nina Olson.
It has taken my case 2.5 years to get to this point and I would like to thank you (Jack Townsend) for making your blog available, plus for all the information you have so thoughtfully provided.
I would also like to thank the Taxpayer Advocate, who changed my life for the positive and helped me get through the OVDI nightmare. TAS had to intervene at least 5 times including issuing a TAO on my behalf.
I would also like to commend my IRS Revenue Agent who had no clue the Taxpayer Advocate was watching and was an incredible professional the entire time. I could not have wished for anyone more helpful and who explained everything to me. I feel that my agent went the extra mile for me as an individual taxpayer. My ex-lawyers were much more difficult to deal with than the IRS ever was. However, this does not excuse the IRS for the bad policy they created.
I would also especially like to thank the contributors to your blog:
Anon123 – for being the first person I noticed protesting the penalties
Just Me – for his invaluable, indefatigable efforts to educate and share and especially for making me aware of the Taxpayer Advocate
Moby - his words convinced me to revoke my attorney’s permission and go it alone (one of the best moves I made in this process)
Sally - for the information she supplied
ij - for the great support
Asher Rubinstein and Michael Miller as they helped me to understand some issues that seem frightening, but explained them so that I could manage them on my own without panic
I am happy to provide more information to you if requested. There is a lot to tell, but I have tried to summarize the latest, most important news here.