The IRS is making major progress in their effort to battle international tax evasion. New information was recently released regarding the IRS’s amnesty program for taxpayers with offshore accounts shows that nearly 30,000 people have voluntarily disclosed their hidden money since 2009. Over 12,000 new disclosures have come come in the last few weeks.
The IRS stated that it has taken in $2.2 billion from taxpayers who have come forward since the program began in 2009. That is nearly 80% of all offshore account-holders. The IRS has also taken in nearly $500 million in taxes and interest. This amount will increase because they have not yet included the penalty amounts.
IRS Commissioner, Doug Shulman, said, “By any measure, we are in the middle of an unprecedented period for our global international tax enforcement efforts. We have pierced international bank secrecy laws, and we are making a serious dent in offshore tax evasion.”
Enforcing the tax laws on a global level is the IRS’s priority. Doug Shulman stated that there has been progress from several places. There have been international agreements and cooperation with foreign governments. The IRS and the Justice Department have boosted efforts to investigate international tax evaders.
The cooperation from other countries has helped advance the 2011 Offshore Voluntary Disclosure Initiative (OVDI). The initiative ended on September 9th, but has had a tremendous response from taxpayers who hold offshore accounts. The IRS continued this initiative from the 2009 program to give offshore account holders another opportunity to come forward and avoid criminal charges while putting money back into the U.S. tax system.
In 2009 alone, nearly 15,000 taxpayers came forward and 3,000 more came in after the deadline. They were allowed to participate in the 2011 program. With that, 12,000 more people came forward and even more are being accounted for. All total, over 30,000 taxpayers have voluntarily disclosed their accounts.
Since the 2011 program began, approximately $500 million has been collected by the IRS, which brings the total amount taken in at $2.7 billion.
The financial outcome is evident in other areas besides the 2009 and 2011 programs.
-Criminal prosecutions: Taxpayers who hide money in offshore accounts have had criminal charges placed on them and have been given jail time for several months and up to several years. They have also been required to pay back hundreds of thousands of dollars in taxes, interest and penalties.
-UBS: In 2009, UBS AG, Switzerland’s largest bank, agreed to pay $780 million in fines, interest and penalties from American taxpayers who held accounts in their banks.
These disclosures give the IRS more information about the banks that have allowed U.S. taxpayers to hide money in their institutions. The IRS plans to use this new information to increase efforts of locating offshore accounts.
