Vice President Joe Biden, the Don-Rickles-without-the-charm, the best Delawarean to ever inhabit the southeast corner of 34th St. and Massachusetts Ave., is at it again, with another regrettable Indian impersonation:

But this attempt to connect with the “common man” by mocking particular speech patterns and accents of those from distant lands is far less insulting than the other latest fad of the US government:  OVDI India (Offshore Voluntary Disclosure Initiatives).

The Common OVDI India Fact Pattern

Since the 2012 OVDI program was announced, nearly every day I speak with an Indian-American wondering what to do, with facts that go something like this:

Hard-working, bright, energetic  Indian leaves his or her mother and father in Delhi for a fantastic job in America on a visa, a green card, or perhaps even dual citizenship. Hard-working, bright energetic Indian is doing great at his or her career and has received promotions. Hard-working, bright, energetic Indian is also generous, and sends money back to India for parents and perhaps siblings as well.  Hard-working, bright, energetic Indian is proud of what he or she has accomplished in America but is also homesick and wants to move back to India at some point to take care of mother and father.  And so sends more money back to India. Not once thinking he or she could possibly be breaking any law.

Everything is going great. Until, just a few weeks ago, hard-working, bright energetic Indian looks at tax organizer the CPA has just sent out. It says to report all your foreign accounts or you will be subjected to harsh penalties.

Hard-working bright, energetic child then goes on the internet and learns that according to the IRS, he or she is a criminal — by simply making a honest mistake in not reporting Indian bank accounts and interest income. He or she further learns that if they don’t pay outrageous penalties, they risk going to jail…and be assessed even bigger penalties.

 

This is the insult I find more dangerous to America. Instead of getting a ‘thank you’ from our country for leaving the familiarity of their home and adding so much value to our economy, Indian-Americans are treated as third-class citizens.

Consider if the shoe was on the other foot. Suppose Johnny America left for a job in Delhi, and things were going just fine–until he realizes he’s  in big trouble because he never told the Indian taxing authorities that he had $50,000 in a Kansas bank.

Think about that. How would we Americans look at the Indian government? Kind of backwards and overreaching, no?

The problem is not reserved to those of Indian ancestry, of course, but those with green cards, dual citizenship, and visa holders from all over the globe. And for what?

The last two OVDI programs brought in enough revenue to fund… a whopping 11 hours of government spending.

For 11 hours of government spending we are rude, insulting, and ungrateful hosts. Maybe we should stop for the day at noon and celebrate diversity by not threatening our invited guests with prison for making an honest mistake.

OVDI is otherwise a great program

If someone actually has a criminal intent to evade taxes by opening accounts to hide income from the IRS, the OVDI program makes a lot of sense — for both the taxpayer and the IRS. And it is generally a good program administered by competent people that has marshaled along a great deal of compliance that would not have occurred otherwise.

However, for so many unsuspecting foreign account holders, there was simply no intent or desire to defraud the United States.  Even the lower penalty structure, and uncertainty of the opt-out 2012 OVDI program is too punitive.  My suggestion is that the IRS grant amnesty to any foreign account holder who happens to have dual citizenship and funded accounts with post-tax dollars. Let’s just say going forward, everyone needs to be in compliance. And for the past, these purported sins need to be forgiven.

Keep America Open and Welcoming

In order to remain exceptional, this country needs a constant influx of highly capable immigrants and guest workers. I am afraid that this OVDI stance has sent a chilling message. Come to America. Work hard.  Be threatened with prison.

You can go here for more info about OVDI & OVDI India.

UPDATE: A client of mine mentioned she saw a online petition. She is unable to find a link. If anyone has it please share.

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Find out more information on Offshore Voluntary Disclosure Initiatives by visiting our main OVDI page or by reading articles from our OVDI blog category.

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