The Unintended Collateral Consequences of Entering into the OVDP for Immigrants
By Anthony Diosdi Taxpayers who hide assets abroad to evade income taxes present a serious enforcement challenge for the Internal Revenue Service (“IRS”). In response, over the years the IRS has developed a number of initiatives to encourage offenders to voluntarily disclose the existence of offshore assets and accounts in exchange for reduced penalties and limited protection from criminal prosecution. In exchange the IRS was able to collect revenue it would not have been ordinarily able to collect. Over the years, the most common initiative for disclosing previously undisclosed foreign financial assets and income was the Offshore Voluntary Disclosure Program (“OVDP”). The IRS announced a number of OVDP programs in 2009, 2011, 2012, 2014, and 2018. However, each OVDP required participants to amend previously filed tax returns and report previously…