The objective of the Offshore Voluntary Disclosure Program (OVDP) is to bring taxpayers that have used undisclosed foreign accounts and undisclosed foreign entities to avoid or evade tax into compliance with United States tax laws.

It enables noncompliant taxpayers to resolve their tax liabilities and minimize their risk of criminal prosecution. To do so, a taxpayer must walk in lockstep with all of the provisions of the voluntary disclosure program. In other words, he must “truthfully, timely, and completely” comply with all of the provisions of the voluntary disclosure program. This is no small feat. When it comes to OVDP, full compliance means opening up your “financial Kimono” and disclosing all of the particulars of your foreign assets, from the financial institution where they were maintained to who specifically facilitated the opening of the accounts. Although voluntary disclosure does not provide an ironclad guarantee of immunity from prosecution, it generally results in prosecution not being recommended.

Another perk of OVDP, according to the IRS, is that it allows taxpayers to determine their miscellaneous offshore penalty to the very penny, thus creating peace of mind by eliminating the risk that the IRS will assert draconian FBAR penalties.

While the Offshore Voluntary Disclosure Program is not exactly a get-out-of-jail free card, it may be the next best thing. It allows the taxpayer to partner with an experienced attorney upfront, so he or she can have an advocate every step of the way as opposed to waiting until things get hairy. As difficult a pill as OVDP might be to swallow, it’s much better to knock on the Service’s door than for them to come knocking on yours.

A question that I am repeatedly asked pertains to the shelf life of the OVDP. It is often couched as follows, “If the OVDP program is a creature of the IRS, does that mean that the IRS can discontinue it anytime it likes?” Technically, “yes.” However, a recent press release issued by the IRS goes a long way to assuaging the concerns of any “nervous nellies” by suggesting that the program isn’t going anywhere anytime soon.

In a press released issued on the IRS website on October 16, 2015 available here, https://www.irs.gov/uac/Newsroom/Offshore-Compliance-Programs-Generate-$8-Billion;-IRSUrges-People-to-Take-Advantage-of-Voluntary-Disclosure-Programs, the IRS announced that its Offshore Voluntary Disclosure Program (OVDP), which began in 2009, has led to more than 54,000 disclosures and generated more than $8 billion. IRS Commissioner John Koskinen stated in the press release that “[p]eople with undisclosed foreign accounts should carefully consider their options and use available avenues, including the offshore program and streamlined procedures, to come back into full compliance with their tax obligations.”