Opting Out of the IRS 2009 OVDP and 2011 OVDI (6/14/11)

Readers have commented on prior blog entries about the opportunities and risks of opting out of the IRS 2009 OVDP and 2001 OVDI. I thought I would devote a specific blog entry to the subject to better focus readers comments, particularly as anecdotal evidence comes out about how the IRS is actually dealing with opt outs, and make them more easily accessible to readers.

The fear among taxpayers and practitioners is that the IRS will be punitive in its application of the penalty structure. We don't know yet whether the fear will be realized.

First, I quote the 2011 OVDI FAQ 51 for the opt out (as updated 6/2/11):

If, after making a voluntary disclosure, a taxpayer disagrees with the application of the offshore penalty, what can the taxpayer do?

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