This week John Koskinen, IRS Commissioner, claimed success based upon FATCA driven voluntary disclosures by US taxapayers. The IRS disclosed more than $10 Billion collected from FBAR compliance through the Offshore Voluntary Disclosure Program or OVDP and the Streamlined Domestic Offshore Procedures.
“The IRS has passed several major milestones in our offshore efforts, collecting a combined $10 billion with 100,000 taxpayers coming back into compliance,” said IRS Commissioner John Koskinen in a recent statement. “As we continue to receive more information on foreign accounts, people’s ability to avoid detection becomes harder and harder. The IRS continues to urge those people with international tax issues to come forward to meet their tax obligations.”
FBAR compliance has been and continues to be the IRS’ highest priority. In the latest figures released by the IRS, more than 55,800 US taxpayers have entered into the OVDP accounting for $9.9 Billion in additional revenues for the IRS. In addition, 48,000 US taxpayers claimed “non-willful” conduct relating to their reporting of offshore accounts and assets while using the streamlined application resulting in an additional $480 Million in revenue. The central question that has remained unanswered by the IRS is simply this:
What happens to those who are not accepted into the streamlined program due the to the IRS’ rejection of their “non-willful” status claim?
The agency recently overhauled the forms for the streamlined program substantially increasing the amount of detailed background information the US taxpayer must disclose under penalty of perjury. The IRS has already sent letters to many who have filed streamlined applications demanding extensive additional historical information regarding their education, financial accounts, business purposes, sources of funding and even personal travel and financial experience.
Recent agreements for foreign banks, investment houses and sovereign tax authorities to provide direct information to the IRS regarding account balance and transactional histories for all offshore accounts associated with US taxpayers passed more than 100 nations recently. Entering its second year, this program has already resulted in the prosecution and jailing of hundreds of taxpayers who refused to come into FBAR compliance. The systems are continuing to match offshore activities to US individual taxpayers including foreign residents who live and work in the United States.
It is not too late to come into FBAR compliance with the IRS. The IRS estimated more than 150,000 people in California alone and over 1 million nationally had unreported offshore accounts. Barely 100,000 people nationwide have entered into voluntary disclosure programs. Those who remain outside of compliance risk harsh, draconian penalties and criminal prosecution for tax evasion. The international tax attorneys and IRS lawyers at Allen Barron invite you to contact us for a free consultation at 866-631-3470 and learn what you can do to save a substantial amount of money while coming into FBAR compliance. The IRS disclosed more than $10 Billion collected from FBAR compliance but expects this is just the tip of the iceberg.