Yesterday, IRS Commissioner Doug Shulman spoke at the 22nd Annual George Washington International Tax Conference. He discussed a broad range of issues from transfer pricing to the use of hybrid structures in international tax planning. However, what I found most interesting were his comments on the landmark UBS settlement and the recent offshore voluntary disclosure program.
1. IRS is Serious About Pursuit of Offshore Tax Evaders
[N]o discussion of offshore tax evasion by individuals would be complete without at least briefly discussing the UBS agreement and our special offshore voluntary disclosure program for unreported income that ran through October 15th of this year.
That program gave people a special chance to come in and get right with the government. And taxpayers took advantage of it in record numbers; our efforts brought more than 14,700 people back into compliance who hadn’t been reporting offshore assets and income.
The unprecedented agreement with the Swiss authorities we reached this past August regarding UBS account holders – and the response to the special offshore voluntary disclosure program – together represent an historic milestone. They proved to the world – especially to account holders, promoters and banks – that we’re serious about our international efforts…we’re serious about piercing the veil of bank secrecy…and we’re serious about carrying forward the momentum to address offshore tax evasion.
2. IRS Will use Information Obtained from Voluntary Disclosures to Pursue Others
We will be mining the 14,700 voluntary disclosures for information to identify financial institutions, advisors, and others who promoted or otherwise facilitated US persons hiding assets and income offshore and attempted to shirk their tax responsibilities at home.
3. IRS Expects Tax Preparers to Assist in Ensuring Future Compliance
The response to the voluntary disclosure program will have ramifications extending far beyond 2009. It will change the conversations that practitioners and tax return preparers will be having with many of their clients this coming tax filing season. Those taxpayers that sought advice from advisors, but chose not to come forward in the voluntary disclosure program, will once again have to confront whether they come clean and properly report these accounts.
We know that many preparers will be expanding their due diligence regarding offshore account issues, both regarding FBAR and income tax reporting. With both preparers and the IRS stepping up their efforts in the area, a “hide-in-the- sand” approach to reporting offshore accounts and income has become a much riskier calculus for US taxpayers holding assets anywhere around the world.
2 responses so far ↓
1 daniel // Feb 7, 2010 at 1:33 pm
The disclosure measure of US, UK, European countries could be alerting to some people, but if the case is that money are not from illegal activity and such proof will be presented and our staff lawyers approve the fact that money are clean then our company could try to resolve the problem of repatriation of moneys using legal means back to UK, US residents pls e-mail to deltalawconsultants@gmail.com
2 Required Reading: Foreign Bank Account Rules for Tax Advisors // Feb 12, 2010 at 10:03 am
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