31 Oct IRS Collects Over $10 Billion From Foreign Bank Accounts
The IRS is no stranger to hunting down individuals who may not be in full compliance with their tax obligations. There number one priority is to get our taxpayer dollars, no surprise. But this time, the IRS has been cracking down on individuals with offshore accounts who are not keeping up with their tax obligations, whether it is accidentally or purposeful.
In 2009, the Internal Revenue Service launched their Offshore Voluntary Disclosure Program (OVDP) and has collected over $10 billion dollars in taxes. This comes from 55,800 tax payers coming into the program paying more than 9.9 billion in taxes, penalties, and interest. 48,000 more individuals have recently entered the program as well, adding $450 million in taxes, penalties, and interest.
With numbers like these, the IRS isn’t showing any signs of slowing up now. They’ve been extremely successful recovering funds. This also made 100,000 taxpayers fully comply with their federal tax obligations. In 2012, they obtained $5 billion dollars in uncollected taxes from offshore accounts. So, it’s safe to say their progress is growing at approximately $4-5 billion every 3 years. Although Americans are allowed to obtain offshore accounts, they must report their foreign bank account activity.
Rather than being outed by someone else, the IRS urges you to come forward, which is the entire mission of OVDP.
IRS commissioner John Koskinen states that it’s becoming “harder” to avoid detection the more they receive information on foreign accounts. There are many individuals who try to put it off and report it in the future whether than now. However, what they fail to realize is that this will raise red flags about where that money has been in the past.
For example, Swiss is a popular place for individuals to hide their assets, with a staggering 42% of all uncollected tax money found by OVDP being hidden there. However, Swiss Parliament passed regulations that allows banks to hand over your identity without breaching Swiss’ bank secrecy laws. This was largely due to a Swiss bank, UBS, getting into enormous trouble with the Justice Department and IRS in 2009. Both parties went to court, and UBS was forced to cough up $780 million dollars for helping wealthy Americans evade taxes with their bank secrecy laws.
This has even triggered the Department of Justice to create a Swiss bank program, where they have an agreement to not prosecute anyone that they inform the IRS about for hiding foreign accounts.
Whatever your situation may be, the IRS urges you to disclose this information before it’s too late. The penalties and potential criminal charges that can come out of this isn’t worth it. Contact Tax Defense Partners if you need assistance with Foreign Bank Account Reporting.