[DIIRSP ended in November, 2020]

IRS Delinquent International Information Return Submission Procedures

Delinquent International Information Return Submission Procedures: The Delinquent International Information Return Submission Procedures (DIIRSP) are an IRS alternative to the Streamlined Program or OVDP. The delinquency procedures are used by U.S. persons to report offshore accounts, assets, and investments to the U.S. government in situations in which OVDP (aka VDP) or the Streamlined Procedures are not necessary.

Generally, when a U.S. person has not filed various international information reporting forms, and has no unreported income – they may be a good candidate for DIIRSP. Even when a person has no unreported income, they may become subject to offshore penalties for unreported international reporting forms such as FBAR and Form 8938.

And, with the IRS making foreign accounts compliance a key enforcement priority, the Delinquent International Information Return Submission Procedures may be appropriate for certain taxpayers.

Our tax and legal team have successfully handled thousands of offshore disclosure matters for clients located all over the world.

Delinquent International Information Return Submission Procedures

Delinquent International Information Return Submission Procedures

A Summary of the How DIIRSP works

The Delinquent International Information Return Submission Procedures (DIIRSP) are complex. The biggest concern for most clients when it comes to the Delinquent International Information Return Submission Procedures are the penalties. The IRS does not state (with absolute certainty) that by submitting to DIIRSP, a person will avoid penalties. Rather, the IRS provides that if a person does not need OVDP or Streamlined, they can submit to the Delinquency Procedures instead. While this presumes that a penalty would be avoided, we understand why some clients are still concerned.

Am I Eligible for Delinquent International Information Return Submission Procedures

Who is eligible for Delinquent International Information Return Submission Procedures?

The IRS provides a summary of who is eligible for the Delinquent International Information Return Submission Procedures, and how to qualify:

Taxpayers who do not need to use the OVDP or the Streamlined Filing Compliance Procedures to file delinquent or amended tax returns to report and pay additional tax, but who:

  • have not filed one or more required international information returns,
  • have reasonable cause for not timely filing the information returns,
  • are not under a civil examination or a criminal investigation by the IRS, and
  • have not already been contacted by the IRS about the delinquent information returns

should file the delinquent information returns with a statement of all facts establishing reasonable cause for the failure to file.  

Reasonable Cause Statement for Delinquent International Information Return Submission Procedures

The Delinquent International Information Return Submission Procedures Reasonable Cause statement is crucial.

As part of the reasonable cause statement, taxpayers must also certify that any entity for which the information returns are being filed was not engaged in tax evasion.  If a reasonable cause statement is not attached to each delinquent information return filed, penalties may be assessed in accordance with existing procedures.

– All delinquent international information returns other than Forms 3520 and 3520-A should be attached to an amended return and filed according to the applicable instructions for the amended return.  

– All delinquent Forms 3520 and 3520-A should be filed according to the applicable instructions for those forms.  

– A reasonable cause statement must be attached to each delinquent information return filed for which reasonable cause is being requested.

– Information returns filed with amended returns will not be automatically subject to audit but may be selected for audit through the existing audit selection processes that are in place for any tax or information returns.

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