The Internal Revenue Service (IRS) has been actively targeting U.S. taxpayers with undisclosed foreign bank accounts for several years. It has promoted the Offshore Voluntary Disclosure Program (OVDP) and the streamlined version of the program to encourage U.S. taxpayers with previously undisclosed foreign bank accounts to come into compliance and pay back taxes while avoiding heavy fines and criminal prosecution.
The U.S. government also has been cracking down on foreign financial institutions and banks that help U.S. taxpayers hide assets in offshore accounts. In 2010 the Foreign Account Tax Compliance Act (FATCA) was enacted by Congress to target non-compliant U.S. taxpayers with foreign accounts.
How successful are FATCA and OVDP?
Here are some statistics:
- 55,800 the number of U.S. taxpayers who revealed offshore bank accounts through the IRS offshore voluntary disclosure programs since 2009 source
- $9.9 billion the amount paid in tax, interest and penalties as a result of OVDP since 2009. source
- 48,000 the number of U.S. taxpayer who have come into compliance using the streamlined version of OVDP 2009. The streamlined version is only available to taxpayers who certify they did not willfully evade taxes. source
- 96,000 the number of delinquent and amended income tax returns filed using streamlined version since 2009. source
- $450 million the amount of taxes, interest and penalties collected from streamlined filings since 2009. source
- 160 accountholders and over 50 facilitators charged criminally with assisting or conspiring with U.S. persons to evade taxes using offshore foreign bank accounts from 2008 to August 2016. source
- 80 the number of Swiss banks that made a complete disclosure of their cross-border activities, provided detailed account information and information as to other banks that transferred or accepted funds related to secret accounts (Category 2 banks – are banks not already under investigation by the U.S.). source
- 113 the number of countries the United States has reached final or provisional agreement with for streamlined information exchange, including the Cayman Islands and China. source
- 200+ civil trial attorneys at the U.S. Department of Justice, who handle affirmative and defensive civil litigation arising under the U.S. internal revenue laws, including defending the United States in tax refund and civil damages suits, defending against lawsuits testing the validity of federal tax regulations and rulings and bringing suits to collect unpaid tax assessments and obtain judgments against delinquent taxpayers. source
- 100+ prosecutors in the U.S. Department of Justice Tax Division who investigate and prosecute individuals and entities that seek to evade taxes, file false tax returns, obstruct the Internal Revenue Service (IRS), or assist others engaged in such criminal conduct. source