The IRS has extended the due date for offshore voluntary disclosure initiative requests until 9 September 2011, due to the potential impact of Hurricane Irene.

The OVDI, announced in February this year, is the second formal IRS amnesty program aimed at US taxpayers with unreported offshore income and assets. As well as the deadline extension, the IRS has also amended the tasks that need to be completed by the deadline for those applying for an extension, advises David Treitel, tax director at US Tax and Financial Services. Due to the changes, Treitel says anyone who has already taken advice should double check with an advisor that they have complied with the entire process.

“While the IRS are suggesting this is due to the potential impact of Hurricane Irene on taxpayers there is considerable speculation that the extra few days were granted simply to give the IRS more time to handle the huge last minute rush,” says Treitel.

Part of the issue is the sheer volume of people who have obligations to the IRS. US citizens and permanent residents are subject to US tax and reporting obligations on their worldwide income, regardless of where they live. US citizenship is automatically granted to anyone born in the US and to many people born outside the US to one US citizen parent, whether or not they have a passport, Kristin Konschnik, a partner in the law firm Withers, pointed out recently in an article for this publication.

“US government statistics would suggest that there are well over 100,000 US citizens and green card holders here in the UK who are US ‘tax delinquent’ but now have until only 9 September 2011 to file for a special OVDI extension with the IRS,” says Treitel.

“The OVDI is not suitable for everyone and is not the only route for delivering tax returns to the IRS. Careful thought and advice is required before filing under the OVDI,” he adds.