Tax evaders get amnesty to declare offshore accounts

The IRS decision to open a second special disclosure initiative follows continuing interest from taxpayers with foreign accounts.

WASHINGTON, United States, – The Internal Revenue Service (IRS) has announced a second special voluntary disclosure initiative which will allow people with undisclosed income in hidden offshore accounts in the Caribbean and other countries to get right with the US government with no risk of prosecution.

The offer will stand up until August 31.

“This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all, and it gives people a chance to come in before we find them,” IRS Commissioner Doug Shulman said in a statement on Tuesday. 

“The situation will just get worse in the months ahead for those hiding assets and income offshore. This new disclosure initiative is the last, best chance for people to get back into the system…This initiative offers them the chance to get certainty about how their case will be handled. Just as importantly, those who truly come in voluntarily can avoid criminal prosecution as well.”

Shulman said combating international tax evasion is a top priority for the IRS and taxpayers hiding assets offshore, who do not come forward under the new initiative, will face far higher penalty scenarios as well as the possibility of criminal prosecution.

The IRS decision to open a second special disclosure initiative follows continuing interest from taxpayers with foreign accounts. 

The first special voluntary disclosure programme closed with 15,000 voluntary disclosures on October 15, 2009. Since that time, more than 3,000 taxpayers have come forward to the IRS with bank accounts from around the world. These taxpayers will also be eligible to take advantage of the special provisions of the new initiative.

The new initiative – called the 2011 Offshore Voluntary Disclosure Initiative (OVDI) – includes several changes from the 2009 Offshore Voluntary Disclosure Programme (OVDP). The overall penalty structure for 2011 is higher, meaning that people who did not come in through the 2009 voluntary disclosure programme will not be rewarded for waiting. 

Shulman said that IRS efforts in the international arena will only increase as time goes on.

“We are not letting up on international tax issues, and more is in the works. For those hiding cash or assets offshore, the time to come in is now. The risk of being caught will only increase,” the IRS commissioner  said.