IRS Offshore Amnesty is Closing, But Crypto Investors Still Have Time: Expert Take

The Crypto community is increasingly facing tax compliance issues, especially with the American IRS. And without an express crypto-centric amnesty, some people have joined the main IRS offshore amnesty known as the Offshore Voluntary Disclosure Program.

There may be offshore crypto accounts, or just offshore bank accounts that can be a hook for getting IRS amnesty.

With the September 28, 2018 OVDP deadline, assemble the Initial Submission while waiting for a response.

In the past, once a taxpayer was precleared to enter OVDP, the taxpayer had 45 days to submit their Initial Submission.

For most people, paying the taxes, interest and penalties, even on up to 8 years as the OVDP requires, is not so bad. It is the bigger account-based penalty in the OVDP that is the hardest to swallow.

If you enter the OVDP, the prospect of opting out can be worth considering, before you pay all the penalties and sign the closing agreement.

According to the Taxpayer Advocate Service, over 1,000 taxpayers opted out of the 2009 and 2011 offshore voluntary disclosure programs.

If you might pay a $50,000 penalty in the OVDP, opting out probably can't save you too much, even if you end up with non-willful penalties.

A $500,000 penalty within the OVDP may make opting out hard to resist, particularly if you have good facts.

The OVDP is predictable, while opting out is much less so.