IRS’s Large Business and International (LB&I) Division announced in January 2017, thirteen initial issue-based campaigns as a new audit strategy. The campaigns span a broad range of topics and intended to offer a comprehensive response to compliance risks.
One of the campaigns mentioned is called the OVDP (Offshore Voluntary Disclosure Program) Declines-Withdrawals Campaign (the “Campaign”). The Campaign addresses withholding & international individual compliance, and is aimed at individuals who applied for pre-clearance through the OVDP since 2009, but were either denied access or withdrew from the program on their own. The Campaign’s lead executive Ms. Pamela Drenthe, stated on May 10th, that six thousand taxpayers are affected by the Campaign.
There are three treatment possibilities available under the Campaign:
- No further action for taxpayers who have become compliant;
- Letters outlining taxpayer options and requiring taxpayer’s response in cases of immaterial noncompliance; and
- Examination for other noncompliant taxpayers. If cases are selected for exam, they will follow normal exam procedures.
Current and ongoing compliance would factor into the IRS’s risk assessment and decision which treatment is decided.
The Campaign will focus exclusively on individuals who previously tried to enter the program, but the IRS will consider information received from other sources as well.
Information received under the Foreign Account Tax Compliance Act could be the subject of future campaigns, Drenthe added.
The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal consultation. Specific legal advice should be sought in accordance with the particular circumstances.