The U.S. Internal Revenue Service has once again reminded U.S. taxpayers with undisclosed offshore accounts to use existing disclosure programs to come into full compliance with their federal tax obligations.
“The IRS has passed several major milestones in our offshore efforts, collecting a combined $10 billion with 100,000 taxpayers coming back into compliance,” said IRS Commissioner John Koskinen in a press release. “As we continue to receive more information on foreign accounts, people’s ability to avoid detection becomes harder and harder. The IRS continues to urge those people with international tax issues to come forward to meet their tax obligations.”
Updated data shows 55,800 taxpayers have used the Offshore Voluntary Disclosure Program to resolve their tax obligations, paying more than $9.9 billion in taxes, interest and penalties since 2009. In addition, another 48,000 taxpayers have made use of separate streamlined procedures to correct prior non-willful omissions and meet their federal tax obligations, paying approximately $450 million in taxes, interest and penalties, the IRS said.
The Offshore Voluntary Disclosure Program offers taxpayers with undisclosed income from foreign financial accounts and assets an opportunity to get current with their tax returns and information reporting obligations.
Taxpayers who come forward under the program and disclose their taxable offshore income and assets in full face less severe penalties and can avoid possible criminal prosecution.
Undeclared offshore accounts are much more likely to be detected than in the past.
Under the Foreign Account Tax Compliance Act and the network of inter-governmental agreements between the U.S. and countries worldwide, automatic third-party account reporting has entered its second year.
More information also continues to come to the IRS from the Department of Justice’s Swiss Bank Program. As part of a series on non-prosecution agreements, the participating banks continue to provide information on potential non-compliance by U.S. taxpayers.
To accommodate taxpayers with non-willful compliance issues, the IRS developed the Streamlined Filing Compliance Procedure. The streamlined procedures have resulted in the submission of more than 96,000 delinquent and amended income tax returns from the 48,000 taxpayers using these procedures.
A separate process exists for those taxpayers who have paid their income taxes but omitted certain other information on returns, such as the Report of Foreign Bank and Financial Accounts, the so-called FBAR.