OVDP – The Global Entity's Safety Net
Today's globalized business world has opened up opportunities for enterprises to run business
across the length and breadth of the globe. Large conglomerates make use of this opportunity
and have spread out wide into the world with offices, manufacturing units, project development
teams available at the most profitable regions. Further with a large population of enterprises in
the United States making use of facilities available elsewhere around the globe in the scope of
profit generations, there is a shift of workforce to various offshore locations too. However, this
generates vast opportunities for transactions in the form of profits, savings and acquiring assets
of the enterprises and individuals in various non-resident regions.
Governments across need to ensure that these enterprises and workforce are compliant with
the tax rules and regulations prevalent across. The Internal Revenue Service has put together a
program that is known as the Overseas Voluntary Disclosure Program. For many taxpayers, this
program is a foreign entity with little understanding and least heard of. However, beginning 2011
federal tax return, the Internal Revenue Service had put in place the Bank Secrecy Act. Under
this, every individual residing in the US- citizens, resident aliens, trusts, estates, and domestic
entities with an interest in foreign financial accounts with a total value of assets of $10,000 at
any time during the calendar year need to file their Foreign Bank Account Report.
The Internal Revenue Service has incorporated such acts to fight against abuse of offshore bank
accounts by the individuals in their attempt to evade United States taxes. The OVDP covers
accounts such as offshore bank accounts, mutual funds, hedge funds, debit card and prepaid
credit card accounts, etc. with major fines installed in case of failure to disclose these.
Today with the Federal government aggressively pursuing taxpayers with undisclosed foreign
accounts and unreported income from foreign investments through information furnished
by the foreign banks and other sources, the tax attorney's and FBAR experts warn that, US
taxpayers who willfully fail to file the FBAR may be subject to a higher monetary penalty besides
being subjected to criminal penalties.
Under such circumstances, it becomes quite imperative that both individuals and corporate tax
payers need to have an effective tax planning in place. By availing the services offered by the
leading tax planning consultants, will help in the financial success of both the individual and the
businesses. Further proper calculation and estimation of taxes and timely filing of FBAR and OVDP
will help avoid any penalties while facilitating profitable business expansions across geographical
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