The IRS has made changes to the terms of its Offshore Voluntary Disclosure Program ("OVDP"), effective July 1, 2014. Through the changes, the IRS intends to provide options to taxpayers that have "unknowingly" failed to disclose their foreign accounts or foreign interests and now want to correct their mistake.

What are the changes?

The "2014 OVDP", as it is now called, features many changes, most notably to the former 2012 OVDP FAQs.

There are now four OVDP options available which have replaced several previous OVDP FAQs from 2012. Two of those options are:

1. OVDP- For taxpayers who have knowingly failed to report foreign financial assets and need to pay taxes, interest and penalties due for the prior 8 tax years (the OVDP period).
2. Streamline Filing Compliance Procedures- For taxpayers who have not disclosed the income under their accounts and need to adjust their returns and pay their tax and penalty obligations.

The changes are aimed at giving more reasonable taxes and penalties to taxpayers whose concealment was non-willful, and penalizing those who have willfully undisclosed their foreign accounts and holdings.

For a more detailed outline of the changes, read our whitepaper: Changes to the Offshore Voluntary Disclosure Program.