Anybody who has offshore banking activity is unswervingly gets affected by the Offshore Voluntary Disclosure Program.
BUT….What exactly Voluntary disclosure is all about?
Voluntary disclosure is nothing but a provision of information by a business’s management beyond necessities like normally accepted accounting principles and Securities, along with Exchange Commission rules, where the information is alleged to be appropriate to the decision-making team of the company which prepares annual reports.
Voluntary disclosure is usually carried out by several companies, even though the degree and the nature of voluntary disclosure differs geographically, industry, and company size, as mentioned by renowned Canadian tax services.
The degree of voluntary disclosure is also affected by the company’s commercial governance structure and of course due to the ownership structure.
Many researchers have found that top administrators have a substantial influence on their companies’ VOLUNTARY DISCLOSURES, and that executives have different disclosure styles connected to their individual backgrounds counting their career paths and military experience.
To comprehend the purpose behind launching this program, first you need to understand the history behind offshore banking.
Origins of Offshore Banking
The major aim of offshore banking was to evade paying unreasonably high taxes. They wanted to find a way to safeguard their hard earned money.
This even opened the door for those that had money from unlawful activities to hide their possessions from high authorities, as mentioned by renowned voluntary disclosure Canada based law firms in their interviews.
As the time passed, standards of concealment by the offshore banks made this a very alluring method of safeguarding funds while receiving a very nice interest rate.
Sometime later, it resulted in a huge loss of revenue for many countries like Canada and difficulties in seizing many criminals.
Numerous people were looking ahead to these offshore banks and voluntary disclosure of these accounts was not happening. Administrators could not circumvent this topic for too much longer,
The loss of income with no one determined to give voluntary disclosure and sideways trouble in seizing prohibited activities into offshore accounts brought offshore banking under the direct eye of the IRS.
(If you too have missed your voluntary disclosure deadline, read this post and decide on what to do next).
The quarrel was that taxpayers were swallowing money. This doesn’t sit well with the IRS. The agency began to closely keep an eye on those taxpayers that held offshore accounts.
Therefore, IRS decided and created the Offshore Voluntary Disclosure Program.