IRS Concludes 2nd Successful Offshore Voluntary Disclosure Initiative
International tax evaders beware: the IRS is cracking down on those who would hide offshore income, and as such are successfully collecting billions of dollars in taxes and penalties.A program introduced in 2009 called the Offshore Voluntary Disclosure Initiative (OVDI) has obtained 30,000 disclosures since its inception.The 2011 initiative which ended on September 9 is the second effort by the IRS to allow those who have not accurately reported international income to come forward voluntarily and avoid criminal prosecution.
The 2009 program brought in $2.2 billion in recovery of taxes and penalties which equaled about 80 percent of initial submissions.The recovery for this year’s program so far is $500 million and does not yet include any penalties.The figure is expected to rise significantly.Disclosures in the 2009 program came from 140 countries around the world.
Support for the OVDI has come in the form of a multi-faceted effort that includes an increase in criminal investigations of international tax evaders, stronger cooperation with foreign governments and new international tax agreements.These initiatives send a message to those who attempt to hide offshore income and increase awareness of the very real possibility of being brought to justice.“My goal all along was to get people back into the U.S. tax system,” said IRS Commissioner Doug Shulman, also noting that the recovery from the OVDI and criminal prosecutions brings much needed revenue back into the U.S. Treasury.
Successful prosecution of international tax evaders has led to jail time of several months to several years and payment millions of dollars in back taxes and penalties.The voluntary disclosure programs have also led to valuable information about banks and advisors who are complicit in hiding foreign income, thus aiding the IRS in enforcement. In one notable case, the Swiss bank UBS agreed to pay the U.S. government $780 million as a result of such enforcement.
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