Offshore Account Collections Reach $10 Billion to IRS

 Posted on January 30, 2017 in Taxation Law

The IRS has announced that it has received nearly $10 billion as part of a special program offered to taxpayers who were shielding assets in undisclosed offshore accounts. The $10 billion dollars was paid by 55,000 taxpayers who utilized the Offshore Voluntary Disclosure Program (OVDP). This sum includes taxes, interest, and penalties.

The OVDP is offered to those with undisclosed income from foreign financial accounts and assets and allows them to come into compliance with tax returns and report obligations. The program incentivizes taxpayers to voluntarily disclose these assets before the IRS finds out about them later. If the IRS discovers that an offshore account has not been disclosed, more severe penalties and possible criminal prosecution can result.

Similar to the OVDP, taxpayers have used a second program called the Streamlined Offshore Disclosure Program to pay approximately $450 million in taxes, interest, and penalties.

This program is used by taxpayers when there is no issue of criminal tax charges or willfulness. So far, about 48,000 taxpayers have used this program.

The IRS Is Getting Better at Offshore Account Detection

Taxpayers with undisclosed offshore accounts have reason to worry. The IRS has been cracking down in recent years on these accounts and tax avoidance strategies. In 2010, the Foreign Account Tax Compliance Act was passed. There have also been more inter-governmental agreements between the U.S. and partner jurisdictions.

The result is that the U.S. will have more access to foreign tax and financial records. While foreign accounts have gone under the radar for years, many people believe that this will not be the case for much longer.

More data is coming to the U.S. government each year, and the IRS is becoming better at analyzing this data. Taxpayers are starting to realize that using these programs while they are available is the least risky way to come into compliance.

Contact a San Francisco Bay Area Tax Lawyer

If you are concerned that an offshore account may pose a problem for you, you should contact a tax lawyer immediately. San Jose tax law attorney John D. Teter is aware of the latest developments in tax law and is able to tell you what laws and programs are implicated by your case. Contact our office at 408-866-1810 for more information.

Source:

https://www.irs.gov/uac/newsroom/offshore-voluntary-compliance-efforts-top-10-billion-more-than-100000-taxpayers-come-back-into-compliance