The 2011 Offshore Voluntary Disclosure Initiative (OVDI) run by the US Internal Revenue Service is being hailed as a success, having resulted in over 12,000 taxpayers coming forward to disclose funds and and pay back taxes on capitals previously hidden in overseas bank accounts.
Under the new program, which offered reduced penalties and no jail time to people that revealed undisclosed offshore income on their own accord, $500 million in back taxes and interest has already been collected and officials expect penalties that have yet to be paid will yield even more.
“The results we’re seeing today were unthinkable just a few short years ago,” IRS Commissioner Douglas Shulman recently told Bloomberg, crediting the program’s success to stepped-up enforcement efforts.
The OVDI, which ran from February to last week, is part of the IRS’ larger plan to crack down on tax dodgers who hide assets in overseas accounts.
In 2009 the agency launched a similar disclosure effort giving taxpayers with undisclosed assets or income offshore a chance to get compliant with tax laws and avoid potential charges. The results were staggering.
New figures showed that from the 2009 offshore program, the IRS has $2.2 billion in hand from taxes, interest and penalties, representing about 80 percent of the 2009 cases that have closed.
Between the two disclosure programs, Shulman said about 30,000 voluntary disclosures have resulted, involving “cases come from every corner of the world, with bank accounts covering 140 countries.”
“The world has clearly changed,” Shulman continued. “You’d have to be living in a hole not to know that the US government is really focused on offshore tax evasion, getting better at it.”
via Money Watch