On January 9, 2012, the Internal Revenue Service (the “IRS”) reopened indefinitely its offshore voluntary disclosure program (the “2012 OVDP”) to assist taxpayers in reporting undisclosed foreign accounts, assets, and income.

This third offshore program is part of the IRS’s continuing efforts to curb tax evasion through the use of offshore structures and financial accounts. The prior offshore programs were opened during the 2009 (OVDP) and 2011 (OVDI) calendar years. These programs garnered significant revenues, and the IRS’s hope for continued revenue along with offering an open door to increase compliance are the two main reasons for the revival of the disclosure program. Since the 2011 program closed this past September, taxpayers have continued to come forward to make voluntary disclosures. According to the press release, such taxpayers will be eligible for the terms offered in new OVDP.

Under the 2012 OVDP, taxpayers with previously undisclosed foreign accounts, assets, and income may be able to avoid criminal prosecution and limit their exposure to civil penalties if they meet certain requirements, including filing all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.