IRS January Fact Sheet/2012 OVDI program

Mach7 · Post by **Mach7** » Wed Jan 11, 2012 12:59 pm

As with a lot of us...I have filed 6 years of returns, and 6 years of FBARs outside of the OVDI program in an effort to become compliant.

This new 2012 IRS OVDI program has upset a lot of people, but as far as I can tell it is the same old same old with higher penalty percentages.

The only thing that stands out is that they require 8 years of back reports....

I am assuming that the 8 years back is for those who participate in the 2012 OVDI??? and not someone who has nothing to hide...paid Canadian taxes...tabulated every account on the FBAR...??

If not, does that mean the rest of us (speaking for Canadians only) have to sent our Accountants another thousand bucks to tally up two more back returns and FBARs.

Or am I reading too much between the lines here.

nelsona · Post by **nelsona** » Wed Jan 11, 2012 2:57 pm

In my opinion, there is no need for Cdns who have reported all INCOME on their filed 1040's (but forgotten 8891 and/or TDF), or have not filed at all, to submit to OVDI.

Quiet disclosure of past 3 year, including RRSP 8891 (and election to defer taxataion) and TDF is quite sufficient... as it always has been.

nelsona · Post by **nelsona** » Wed Jan 11, 2012 2:58 pm

Only those who were either living in US in the past 6 years, and/or filed a 1040 without including foreign income should use OVDI.

I don't know whetre they are coming up with an 8 year requirement.

blairgoates · Post by **blairgoates** » Fri Jan 13, 2012 3:04 am

What 2012 OVDI are you referring to ?

blairgoates · Post by **blairgoates** » Fri Jan 13, 2012 3:27 am

Never mind...I found it. Here we go again, ie soft disclosure vs. OVDI. Has ANYONE suffered with quiet disclosure when no tax liability was due ?

Even when there is a tax liability has ANYONE been charged accuracy penalties or not been successful with reasonable cause with soft disclosure ?

I hate this confusion...or is it just me ?

Thanks

nelsona · Post by **nelsona** » Fri Jan 13, 2012 7:00 am

It is not just you.

walsh · Post by **walsh** » Thu Mar 29, 2012 2:08 am

[quote="nelsona"]In my opinion, there is no need for Cdns who have reported all INCOME on their filed 1040's (but forgotten 8891 and/or TDF), or have not filed at all, to submit to OVDI.

Quiet disclosure of past 3 year, including RRSP 8891 (and election to defer taxataion) and TDF is quite sufficient... as it always has been.[/quote]

Is this also applies to Canadian living in US with green card for the past 6 years? We can just do quite disclosure.

renwoman123 · Post by **renwoman123** » Fri Mar 30, 2012 11:33 am

Hello Nelsona
On Thu Oct 28, 2010 11:12 am you said to someone

I would be filing 8891 now for the years you missed. They are
late and subject to penalty, regardless of what you
do with your RRSP.
Now you are recommending everyone to just backfile the 8891 and you
will be fine.
So confused and wondering which is true -penalties or you will be fine- why did you change your statement since around September 2011?

I have to backfile only Form 8891 from 2007 to 2010--nothing else.

1. All tax returns for those years were submitted on time.
2. All FBAR's for those years were filed each year on time
by June including all bank accounts and the RRSP's on that form.
3. All Schedule B with the interest income I made in Canadian Banks
were submitted.

I answered no to 8 because I didnt' know about the trust question
was RRSP's so didn't include the 8891.

So am I to believe that I can just attach an 8891 to each 1040x
for those years and submit??

Should I also amend the Schedule B and answer yes to 8 on all
those years.

Will I be subject to a penalty of 25 % or more of the total amount in the
RRSP"S I have as everyone is saying?

I called the irs and the guy who you are right most of the
time clueless came back and forth off the phone and said to
just attach the 8891 to a 1040x and in explanation area explain why.
They will not talk about penalties you have to talk to your accountant they say.

Is this the best bet to not be penalized considering I am voluntarily doing it and have filed everything else including reporting of RRSP"s on the FBAR already all those years.
So what do you suggest.
Also should I file a Schedule E with that as well and attach that
to the first 2007 amended return with the 8891.
Thanks Nelsona

walsh · Post by **walsh** » Tue Apr 10, 2012 9:03 pm

Yes, I also heard two versions of this:
1) Fill out delinquent FBAR. But can't just back file 8891, need to use private letter of ruling. Otherwise, IRS will charge interest and penalties on the RRSP

2) According OVDI Q42, even it is addressing 3520, but also applies to 8891. So just back file the 8891 and FBAR.

So, I am not sure which one is correct.

nelsona · Post by **nelsona** » Tue Apr 10, 2012 9:58 pm

In 12 years I've never heard of anyone filing 8891 (or precedents) and being penalized. PLR is a way for acct firms to extort money, quite frankly by scare mongering.

You cannot be charged penalty if you owe no tax, and you owe no tax if you elect to defer taxation.

IRS is never right "most of the time" on phone.

I've been doing this for YEARS.

nelsona · Post by **nelsona** » Tue Apr 10, 2012 10:00 pm

You do not do this under OVDI, that is for tax cheats.

renwoman123 · Post by **renwoman123** » Fri Apr 13, 2012 5:07 pm

Hello Nelsona
Does it matter if you are a resident of Canada or a resident of the US when you backfile the 8891.
What has been your experience over the years are they both just as likely to be successful.
Thanks