OUR THOUGHTS ON:

Hurricane Irene Blows the Deadline for OVDI to September 9, 2011

Tax

By Ron Kramer

Late Friday, August 26, the Internal Revenue Service (IRS) announced that the August 31, 2011 deadline to comply with the IRS’s Offshore Voluntary Disclosure Initiative (OVDI) would be extended to September 9, 2011, because of the potential impact of Hurricane Irene. As we have explained in previous Insights, the OVDI is aimed at taxpayers with undisclosed foreign bank accounts and foreign entities that U.S. taxpayers have used to avoid U.S. income taxes.

Although, the extension is short, it will provide those taxpayers who have procrastinated and have not yet entered the program additional time to submit their Offshore Voluntary Disclosure Letter to be accepted into the program. In addition, those taxpayers who are unable to complete their OVDI submission package by September 9, 2011 may request a 90 day extension by submitting a written extension request to the IRS on or before September 9, 2011.

Although not specifically addressed in the original IRS statement, the IRS clarified later on August 29 that the extension to September 9, 2011 would also apply to those taxpayers who have previously reported all income related to foreign accounts, but are delinquent in filing certain foreign information returns related to those accounts. These taxpayers will now have until September 9, 2011 to file the forms and avoid delinquent return penalties.

More details about the OVDI are provided in a series of questions and answers at http://www.irs.gov/newsroom/article/0,,id=234900,00.html

If you have any questions as to how the IRS’s Offshore Voluntary Disclosure Initiative applies to you, or if you would like Schneider Downs to assist you with your offshore reporting and compliance requirements, please contact a Schneider Downs tax services representative.

Schneider Downs provides accounting, tax wealth management, technology and business advisory services, through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA and Columbus, OH.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

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