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IRS Commissioner Touts Success of Offshore Voluntary Disclosure Programs

Tax

By Ron Kramer

On September 15th, IRS Commissioner Douglas H. Shulman issued a statement touting the success of the Internal Revenue Service’s 2009 and 2011 Offshore Voluntary Disclosure Programs. The most recent offshore program, the 2011 Offshore Voluntary Disclosure Initiative (OVDI), ended on September 9, 2011. The previous program, known as the 2009 Offshore Voluntary Disclosure Program (OVDP), closed on October 15, 2009. Both offshore programs were designed to give U.S. taxpayers, with undisclosed assets or income from offshore accounts, a chance to get back into compliance with U.S. tax laws. These programs offered taxpayers less severe penalty provisions and a chance to avoid criminal prosecution if they voluntarily came forward.

Commissioner Shulman provided the following statistics related to the success of the 2009 and 2011 offshore programs:

  • The IRS received 12,000 new applications to participate in the 2011 OVDI program.
  • $500 million in taxes and interest has been collected in down payments with the 2011 OVDI program. This amount does not include penalties that will be collected under the program.
  • 15,000 applications were received from the 2009 OVDP program.
  • 3,000 more taxpayers came forward after the October 15, 2009 deadline for the 2009 OVDP program. (These taxpayers could elect to participate in the 2011 OVDI).
  • 80% of the 2009 OVDP cases have been settled.
  • $2.2 billion has been collected so far from the 2009 OVDP program.

Commissioner Shulman noted that IRS’ efforts against offshore tax evasion have substantially increased the risk of being caught to those who did not come forward under the voluntary program. At the present time, the IRS has no plans to launch another voluntary disclosure program. Accordingly, those taxpayers still hiding assets offshore and get caught, should expect much less mercy from the IRS.

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