When the IRS receives payment with amended tax returns for taxes, interest and penalties, the…
IRS Publicizes and Celebrates OVDI Success
As expected, the United States Internal Revenue Service (IRS) has disclosed that the recently-completed offshore voluntary offshore initiative (OVDI) has pushed the total number of voluntary disclosures up to 30,000 since 2009. The IRS customarily publicizes (and celebrates) such accomplishments.
The 2011 OVDI, which was announced in February this year, followed a previous disclosure initiative in 2009. In the 2011 initiative, there was a penalty framework that generally required individuals to pay a penalty of 25% of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period.
In all, the IRS confirmed that 12,000 new applications came in from the 2011 OVDI that closed on September 9. It has collected USD2.2bn so far from people who participated in the 2009 OVDI, reflecting closures of about 80% of the cases from the initial initiative. On top of that, the IRS has already collected an additional USD500m in taxes and interest as down payments for the 2011 initiative – a figure, it said, that will increase because it does not yet include penalties.
“By any measure, we are in the middle of an unprecedented period for our global international tax enforcement efforts,” said IRS Commissioner Doug Shulman. “We have pierced international bank secrecy laws, and we are making a serious dent in offshore tax evasion.”
“My goal all along was to get people back into the US tax system,” Shulman continued. “Not only are we bringing people back into the US tax system, we are bringing revenue into the US Treasury.”
It was also added that the two OVDIs “have provided the IRS with a wealth of information on various banks and advisors assisting people with offshore tax evasion, and the IRS will use this information to continue its international enforcement efforts.”
Patel Law Offices has assisted over 100 taxpayers with offshore asset plannning and filed dozens of OVDI applications. Our firm is now assisting clients with existing traditional Voluntary Disclosure Practice filings outside of OVDI. The IRS has detailed the terms of its existing traditional Voluntary Disclosure Practice in its Internal Revenue Manual (IRM) 126.96.36.199 (titled “TAX CRIMES – GENERAL”).
Patel Law Offices is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems. Our firm assists (and aggresively defends) clients and their advisors to legally disclose (and legitimize) foreign accounts.
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