If you are like many Minnesota residents, you have have experienced challenges when income tax season rolls around at least once. In some cases, it can be hard to come up with the money that you may owe to the Internal Revenue Service. This can be a very stressful thing. Sometimes the high price of taxes can make you look at options for investing your money that may help lower your tax bill.
If you have ever opened a bank account in another country, you might know that the rules about reporting offshore assets can be tricky. It is possible that some assets are not properly valued on tax returns or not reported when they should be. People caught in these situations may be subject to extremely high fines and even criminal charges but the IRS has actually established a program via which this may be avoided.
Called the Offshore Voluntary Disclosure Program, it gives taxpayers the ability to report previously unreported foreign assets or to file amended returns with updated asset value. Participating in the OVDP can help people get current on their tax return filings and tax liabilities with no fear of future criminal prosecution or collection efforts by the IRS for any past due amounts related to their offshore accounts. It may also help to offset some of the interest and penalties that would otherwise be assessed.
This information is not intended to provide legal advice but is instead meant to provide Minnesota taxpayers an overview of the IRS' Offshore Voluntary Disclosure Program, how it works and how it may benefit them.