(Bloomberg News) The Internal Revenue Service is giving U.S. citizens who have shielded assets offshore a third opportunity to come clean, pay a penalty and avoid criminal prosecution.
After collecting $4.4 billion in two so-called voluntary disclosure programs for offshore accounts, the IRS announced plans yesterday to revive the program. Participants will pay as much as 27.5 percent of their most valuable offshore assets or their biggest overseas bank account. They also must disclose the banks and advisers that helped them escape U.S. tax laws.
The program's revival is part of the U.S. government's efforts to track down and prevent tax evasion around the world. Since 2009, the U.S. has prosecuted clients of UBS AG and HSBC Holdings Plc. Switzerland's Weglin & Co. said on Jan. 4 that three of its bankers have been charged with conspiring to help U.S. clients hide more than $1.2 billion from the IRS.
"We're gaining momentum in our international efforts and the word is spreading across the globe," IRS Commissioner Doug Shulman told reporters on a conference call yesterday.
He wouldn't comment on legal cases the U.S. is pursuing.
Shulman said 33,000 disclosures were made in the two previous versions of the voluntary program. An effort that began in 2009 resulted in $3.4 billion in collections. The second program in 2011 yielded about $1 billion for the IRS, and Shulman said he expects that amount to rise.
'Enormous' Problem
Senator Carl Levin, a Michigan Democrat who heads the Permanent Subcommittee on Investigations, said the statistics demonstrate "how enormous the offshore tax evasion problem is."
"Taxpayers are turning themselves in because federal prosecutors have finally begun to go after the individual tax- haven banks, bankers and other financial professionals helping them chat on their taxes," Levin said in a press release.
Taxpayers with undeclared assets might be more willing to work with the IRS amid fewer options to protect themselves offshore, said Kevin Packman, the chairman of the offshore tax compliance team at Holland & Knight LLP in Miami.