The IRS announced on March 13, 2018, that it will begin to ramp down the current OVDP and urged taxpayers with undisclosed foreign assets to apply for the program before it closes on September 28, 2018.
Finally, the FAQs that the IRS released clarifying why the IRS is shutting the OVDP down suggest that the IRS may intend to “repeal and replace” the OVDP with some other program. Both the IRS’s FAQs and announcement include a request for comments on the closure of the 2014 OVDP and request suggestions on future voluntary disclosure practice procedures. Such comments presumably would be taken into account under a new voluntary disclosure program in the future.
Voluntary disclosure has a long tradition in IRS practice. Regardless of a formal IRS program like the 2014 OVDP, practitioners generally expect that some form of voluntary disclosure will still be an option after September 28, 2018, in the right circumstances, for taxpayers with “willfulness issues” regarding their offshore assets. Even so, now is the time to come forward, if taxpayers have not already done so.