Post OVDI Process Discussion Thread

zen · Post by **zen** » Fri Sep 02, 2011 5:02 am

Friends,
When I first posted the question on OVDI process in this forum, I never expected it to be a nightmare. Over these past few months, it turned out that many of our Indian friends had to take part in this initiative, mostly due to lack of knowledge & misunderstanding in this complicated field of reporting foreign income.

For those who have sent their OVDI applications, the first hurdle is over. I strongly believe that we have taken the right decision to take part in OVDI. I'm sure we all want a quick, less painful resolution to this issue. Many of us have complicated cases & this forum has really helped us all in understanding the process. Many experts have provided valuable guidance & we really appreciate it.

Now that we have sent in the OVDI applications, I thought that we work as a team and share our experiences in this "Post OVDI" thread. This can include any correspondence that we get from IRS (queries, letters, interviews etc). This will just help us in handling our cases with the IRS. Please keep discretion in discussing personal information & keep the discussions related to the "Post OVDI" process only.

Considering the seriousness of this issue, I would like to request the admins to lock this thread and only provide access to members.

Thanks again for everyone's cooperation on this serious issue.

zen · Post by **zen** » Fri Sep 02, 2011 7:50 pm

For those who sent their application, has the check been deposited yet?

zyzy · Post by **zyzy** » Sat Sep 03, 2011 7:22 am

One question - Did you guys have to send the penalty as well (with the backtaxes+interest+accuracy penalty) with the package OR is that something that gets determined and paid at a later date ?

I have just started down this path. Its going to be a long journey that will wipe me clean.

btw, zen - I see you are a very active member of this section of the forum. I was just curious what kind of penalty amount did you pay - if you dont mind sharing.

For me its going to be big penalty bill (upwards of 80k) if they do not allow me to remove the duplicate amount between the funds (which are already part of the penalty base) and the FMV of the asset (that was bought using that fund). Does anybody know what is IRS' position on this?

realgoogler · Post by **realgoogler** » Sat Sep 03, 2011 9:14 pm

zyzy;408271One question - Did you guys have to send the penalty as well (with the backtaxes+interest+accuracy penalty) with the package OR is that something that gets determined and paid at a later date ?

I have just started down this path. Its going to be a long journey that will wipe me clean.

btw, zen - I see you are a very active member of this section of the forum. I was just curious what kind of penalty amount did you pay - if you dont mind sharing.

For me its going to be big penalty bill (upwards of 80k) if they do not allow me to remove the duplicate amount between the funds (which are already part of the penalty base) and the FMV of the asset (that was bought using that fund). Does anybody know what is IRS' position on this?

You can remove duplication as long as you can show the transfers.
If it is going to be such huge amount, you could consider taking risk using the Opt out option, If they apply reasonable clause it could be much lower.

sugnani · Post by **sugnani** » Sun Sep 04, 2011 8:49 am

Hi zyzy, I think if you dont have any income from the asset, then you dont have to report it.

zyzy · Post by **zyzy** » Sun Sep 04, 2011 1:34 pm

sugnani,

Are you sure about this? It would be a huge relief if that is true.

Here are the specific details about my situation:

I bought a house with funds from two sources:
(1) Funds from an account that was not reported and had a small unreported income.
(2) Fully-taxed US Funds directly wired from the US to the builder's account

The house did not produce income and is for the family.

Now I know that the account mentioned in (1) above will be part of the penalty base but can I take the house out of the equation based on the above facts.

zyzy · Post by **zyzy** » Mon Sep 05, 2011 5:12 am

Can anybody in a similar situation answer the above question:

Should a property that did not bring in any income but was bought from a tainted account be included in the penalty base?

I hear people saying "NO" like sugnani above but the IRS FAQ and attorney Jack Townsend's answer to a person with a similar question here http://federaltaxcrimes.blogspot.com/2011/08/tax-notes-has-published-article-marie.html#comments appears to suggest that the property should be included in the penalty base even if it brought no income but was bought from a tainted account (which by the way is already included in the penalty base).

Anybody sure about this OR am I the only desi with an "asset" issue here?

chal · Post by **chal** » Mon Sep 05, 2011 10:00 pm

zyzy:
There was some good discussion on this at http://www.r2iclubforums.com/forums/showthread.php/23763-Offshore-Voluntary-Disclosure-Initiative-or-Tax-Amends
Look for greyfri's posts or read them all. All the best to you.

binarysemaphore · Post by **binarysemaphore** » Tue Sep 06, 2011 12:00 am

zen;408193For those who sent their application, has the check been deposited yet?

My check was cashed last week. I feel lighter now (somewhat) that I have paid my dues to this nation.

Per year tax owed by me is so less. I still cannot believe that I messed up my taxes.

I think most of us were focussing more on immigration laws (visa stamping, I-94, timely renewal of 797, passport renewal, labor, 140, 485 etc:)) and missed this worldwide income tax law.

desibaba · Post by **desibaba** » Tue Sep 06, 2011 1:29 am

My check cashed on 2nd Sep. Mailed package on Aug 25th.