Be careful what you wish for the IRS may view the facts and equities of a case very differently than the taxpayer

With the June 18 announcements, the IRS may have come up with a good way to avoid a near certain train wreck of its own making if it didn't do something soon about its offshore compliance program.
But remember it is a procedure designed by lawyers for lawyers and simply put…..it is a “Buyer Beware” world when you enter the New simplified process. The IRS may or may not be fair NOW. While the Commissioner has praised the various OVDP progress as a huge success - which many would disagree with for various reasons, no government program can be deemed a success if it takes 1-2 years to get an agent assigned to do the work that needs to be done to allow a taxpayer to take care of a tax issue and get on with his life.  The IRS has conceded finally that “one size does not fit all” and the agency now has the chance to dispel the widely-held perception that it was not up to the task of sorting out willful from non-willful conduct and in the process bring the long standing voluntary disclosure protocols to a standstill.  We have yet to see whether the new FATCA technology will live up to its anticipated promise of an efficient, “one world” financial and banking data base. I doubt it.

Btw.  to clarify that the increase in the OVDP offshore penalty rate from 27.5% to 50% beginning on August 4, 2014, taxpayers will be subject to an enhanced 50% offshore penalty only if :

1. Their foreign financial institution has become a target of investigation by the IRS or the Department of Justice; or

2. Their foreign financial institution is cooperating with the IRS or the Department of Justice to help them locate tax evaders (FATCA IGA etc.) ; or

3. Their foreign financial institution has been identified in a court-approved summons seeking information about U.S. taxpayers who may hold financial accounts at that institution.