We have covered the IRS' Offshore Voluntary Disclosure Initiative in several of our previous posts. The OVDI allows California taxpayers with undisclosed offshore bank accounts to voluntarily report their undisclosed assets to the IRS in exchange for amnesty from any criminal tax evasion charges. The OVDI does impose some pretty hefty penalties on participants but these penalties are not as severe as those associated with the IRS finding an Orange County taxpayer's offshore bank account on its own.
The original deadline for OVDI applications was today, August 31, but the IRS has extended the deadline until September 9, 2011 because of Hurricane Irene. The hurricane pummeled the east cost over the weekend and impacted nearly 55 million people, which is almost the population of the United Kingdom. Towns are flooded from Puerto Rico to Vermont, and many people are still without power, which makes for less than ideal conditions to get an OVDI application together.
Although Hurricane Irene did not impact the vast majority of Orange County taxpayers, the new deadline applies to everyone, so it is not too late to seek an experienced California tax law attorney to discuss your case and prepare a successful OVDI application.
The September 9, 2011 extension also applies to those Orange County taxpayers who are filing a delinquent Form TD F 90-22.1, "Report of Foreign Bank and Financial Accounts" (FBAR) and the IRS has noted that it will not impose a penalty on taxpayers who failed to file information returns for which there are no underreported tax liabilities associated.
Source: Forbes, "IRS Extends OVDI Deadline Due to Hurricane Irene," Kelly Phillips Erb, Aug. 27, 2011