From the previous two OVDPs of 2011 and 2009, the government managed to achieve around 33,000 voluntary disclosures with a total collection of US$4.4 billion on offshore accounts.
The third installment of the program is similar to the 2011 program, but with a few key differences: Unlike last year, there is no set application deadline, but the terms of the program could change at any time, the IRS says.
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For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers, or decide to end the program at any point.
Under the new program, most participants are required to pay a penalty of 27.5% (raised from the 25% in 2011) of the highest aggregate balance in foreign bank accounts/entities as well as disclose the names of the banks and financial advisors that have helped them with their tax evasion.
Taxpayers in limited situations can qualify for a 5% penalty, the IRS said. Smaller offshore accounts, whose offshore accounts or assets did not surpass US$75,000, will face a 12.5% penalty.
Participants have to file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.
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By GlobalData"The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced," the IRS said in a statement.
"Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers. We have billions of dollars in hand from our previous efforts. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system," added IRS Commissioner Doug Shulman.
