US tax authorities pass $10bn offshore tax milestone
The Internal Revenue Service (IRS) said the move had prompted over 100,000 taxpayers to come forward, and credited the introduction of automatic third-party account reporting with accelerating the process.
25 Oct 2016
Latest figures indicate 55,800 taxpayers have entered the IRS’s offshore voluntary disclosure program to resolve their tax obligations, paying more than $9.9bn in taxes, interest and penalties since 2009. On top of that, an additional 48,000 taxpayers who have not wilfully avoided paying taxes have made use of separate streamlined procedures to correct their previous omissions and meet their federal tax obligations, paying approximately $450m in taxes, interest and penalties.
John Koskinen, IRS commissioner, said: ‘The IRS has passed several major milestones in our offshore efforts, collecting a combined $10bn with 100,000 taxpayers coming back into compliance. As we continue to receive more information on foreign accounts, people’s ability to avoid detection becomes harder and harder.’
The IRS has developed a streamlined filing compliance program that is open to taxpayers in the US and other countries who have not been wilfully avoiding taxes. The procedures have led to the submission of over 96,000 delinquent and amended income tax returns from 48,000 taxpayers using these procedures.
The US tax authority said that automatic third-party account reporting following the introduction of the Foreign Account Tax Compliance Act (FATCA) has now entered its second year and is convincing more taxpayers to voluntarily disclose their holdings before their bank provides it to the tax authorities.
More information also continues to come to the IRS as a result of the justice department’s Swiss bank program, the IRS noted. As part of a series of non-prosecution agreements with banks such as UBS, the participating banks continue to offer information on potential non-compliance by US taxpayers.