The Internal Revenue Service has declared its Offshore Voluntary Initiative programme a success in a statement released last week. The amnesty, which expired on April 15, encouraged individuals with questionable offshore banking arrangements to come forward voluntarily and thus avoid civil or criminal penalties. Over 1,200 people had come forward by the deadline.
Describing the response as "strong", acting IRS Commissioner Bob Wenzel said that the initiative had provided the agency with many leads to follow up in future investigations.
"People with multi-million dollar tax bills came forward, and they identified scores of new promoters of offshore tax schemes for further investigation. This effort sends a powerful signal to offshore tax evaders still out there and others considering hiding money overseas," he announced.
According to the IRS figures, 1,253 individuals volunteered information on some $50 million worth of undeclared taxes. Of these, Florida accounted for the largest proportion, with 114 coming forward from the Sunshine state. California produced 115 amnesty seekers, and 71 Texans contacted the IRS during the amnesty. The OVCI also discovered 80 tax shelter promotion firms.
The Revenue expects the overall amount of undeclared taxes to hit $100 million once other leads have been followed up.
Treasury Assistant Secretary, Pam Olson, warned last week that those taxpayers who did not disclose information under the OVCI will now be subject to more severe penalties, and possibly criminal sanctions.
"Treasury and the IRS must ensure that the IRS has the information necessary for it to fully and fairly enforce the tax laws. The voluntary compliance initiative is an important source of information," she explained, continuing:
"Treasury will continue its efforts to improve and expand the US's broad network of bilateral tax treaties and tax information exchange agreements. Better tax information exchange relationships will permit the IRS to obtain the information it needs from other countries so it can pursue taxpayers attempting to hide income offshore to avoid their tax obligations."
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