Senators Retract Criticism Of IRS OVCI Amnesty

by Mike Godfrey, Tax-News.com, Washington

04 August 2003

Two United States Senators have been forced to retract their criticism of the Internal Revenue Service's Offshore Voluntary Compliance Initiative after it came to light that they had cited the wrong figures.

In a letter to Treasury Secretary John Snow, Senators Charles Grassley, chairman of the Senate Finance Committee, and Max Baucus, the committee's ranking Democrat, lambasted the IRS for supposedly assessing a mere $3.3 million, and collecting less than $1 million in taxes from an amnesty designed to encourage individuals to declare their offshore income in exchange for less severe penalties.

However, the Senators have since admitted that their staff misread the Treasury inspector general's report and had mistaken the OVCI for the OCCP (Offshore Credit Card Program), which is a smaller component of the main amnesty scheme. According to recently released IRS figures, the OVCI has to date collected $75 million in unpaid taxes, receiving applications from nearly 1,300 individuals.

In a rather understated follow-up letter to the Treasury Secretary, the Senators acknowledged their mistake, but urged Mr Snow to continue the fight against tax evasion. "While the corrected numbers...show that the IRS's Offshore Voluntary Compliance Initiative has been more successful than previously thought, it's important that we continue to monitor these programmes," the Financial Times quoted them as observing.

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