COMPARISON CHART – OVDP VS. STREAMLINED FILING COMPLIANCE PROCEDURES

COMPARISON CHART – OVDP VERSUS STREAMLINED

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CHARACTERISTIC	OVDP	STREAMLNED
Up Front Qualification?	Yes -Names clearance (30 days) & Provisional acceptance after OVDP letter (45 days) – CI reviews for specific info received about taxpayer & reviews OVDP letter for completeness.	No – Not told up-front if qualifying
Eligibility requirements ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓	Individuals, estates, or entities – E.G, corps, partnerships, trusts (FAQ 13) Offshore but can include Domestic Generally, Unreported income Not presently under examination – civil or criminal • Civil exam start – receipt of audit letter (i.e., 2202, 2202B, 2205A • Exam end – signed 4549 & IRS acceptance letter 987 (agreed) received • No open NOD	Individuals or estates – not entities (U.S. Citizen, Green Card, SPT. For offshore but can include domestic Generally, Unreported income (see FAQ 7 for persons living in US) Not presently under examination – same meaning as for OVDP
↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ Source of income test Non-willful certification	No residency test Must cooperate Make good faith arrangements to pay Meet requirements of IRM 9.5.11.9 which encompasses the above. . Legal source N/A – but if op-out must support reasonable cause or non-willful or mitigation	Residency test – 2 groups · Outside US – No US abode (where live) & 330 days out.in any look back yr. · Living inside US.- Fail to meet living outside test No cooperation required but see IRM Vol. Disclosure rules Must pay with filing – Probably could request installments – Call OVDP Hotline. Streamlined filing might meet IRM Vol Disclosure test if complies with IRM 9.5.11.9 Legal source Legal source Must submit under penalties of perjury – see below Non-willful = Negligence • • Inadvertence • Mistake • Conduct resulting from good faith misunderstanding of requirements of law.
Joint of separate returns?	Spouses may submit jointly or separately or only one may submit	Joint original return – must file joint amended return. Spouse won’t sign – submit joint return with one signature if return shows net increase in tax due.
Returns eligible Due diligence required?	Filed or unfiled Yes	Only filed 1040s or 1041s if living in U.S. File & unfiled if outside U.S. Yes
Years included	Eight for which due date of 1040 passed FBAR inclusion linked to 1040 years included. (due 90 days following provisional acceptance)	3 for which due date of 1040 passed; 6 for which due date of FBAR passed. Exclude compliant years from submission.
Criminal amnesty?	Yes	No, but perhaps Vol Disclosure
Income tax penalty	20% accuracy related, FTF (if delinquent returns filed), FTP	• Outside US None for amended or delinquent returns. • Living inside US None – for amended returns. • If audited None for reported assets or income as long as original return not fraudulent & FBAR not willful. Any additional deficiency subject to all penalties. • Previously assessed penalties – not abated.
Misc. Offshore Penalty	27.5% to 50% if any account with enabler bank at any time during OVDP period.	Living out of U.S. – none Living in U.S. – 5% (if non-willful) (audit – as for income. Tax)
Asset Base for Offshore Penalty Valuation	All assets connected to non-compliance – FAQ 35 But, not assets for which income was reported – FAQ 45 Any reasonable method	Foreign Financial Assets not correctly reported on FBAR or 8938 or income on such assets not reported even if asset on FBAR or 8938. Year-end balances.
Amount penalty applied to	Highest aggregate value for year in OVDP 8-year period	Highest year-end aggregate balance in Streamlined six-year period
Certainty of result – civil? Certainty of result – criminal?	Yes as to foreign issues – unless opt-out. No as to domestic issues. Yes	No No
SOLs Applied? 872 Required to be signed?	No – unless opt-out as to foreign issues. Yes – domestic issues if audit • Yes & FBAR extension	Yes – In theory IRS can audit back more than 3 years – but would frustrate stated goal. • No 872 or FBAR extension
Time to complete	1 ½ year to 2 years	Usually 1-3 months to filing
Automatic audit?	No (open only as to domestic issues)	No (but all issues fair game) Penalties – see above
Public disclosure?	No	No
Suggested for	Tax criminal, or Civilly willful	Non-willful or reasonable cause but wanting to cut risks of non-willful FBAR penalty & income tax penalties if quiet filing.
Special PFIC rules available?	Yes, FAQ 10	No
Document production scope	Large – FAQ 25	Non-willful certification
Cost	Extremely expensive	Expensive
Phases	Five: (1)names clearance (2) OVDP Letter.(3) Package submission (4) Agent review (5) Closing agreement	One: File returns with Non-Willful Certification (Form 14653 or 14654)
Concluded by	Signing Form 906, Closing Agreement on Final Determination Covering Specific Matters	No document signed – No acknowledgement – Must wait out SOLs.
Payment due	With package submission but not being strictly enforced	With Streamlined Filing
Foreign entity reporting relief?	Yes – For nominee entities – if Statement of Abandoned Entities filed.(FAQ 29)	No- all required foreign reporting forms must be filed.
Relief for Canadian Registered Retirement Income Fund – failure to elect Treaty deferral?	Yes – under Rev. Proc. 2014-55 (FAQs 54.2-54.4)	Yes – under Rev. Proc. 2014-55 (FAQs 8 – 12 for persons living in US & FAQs 2 – 5 for persons living outside the US)
Last 3 years compliant – but FBARS not filed for years 4-6 going back	N/A – if not criminal or civilly willful	If no reasonable cause – file Streamlined using FAQ 7 for per persons living in US).

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COMPARISON CHART – OVDP VS. STREAMLINED FILING COMPLIANCE PROCEDURES