IRS Streamlines Efforts to Collect Billions in Taxes from Offshore Tax Evaders
JUNE 18, 2014, St. Louis, Missouri… The law firm Capes, Sokol, Goodman & Sarachan, P.C. in St. Louis reports that a new initiative announced today by the Internal Revenue Service is expected to lead to a substantial increase in the number of U.S. taxpayers coming forward to report undisclosed foreign accounts.
IRS commissioner John Koskinen announced today that the IRS is implementing changes to its offshore account compliance program that will impact U.S. taxpayers who have willfully failed to disclose their tax obligations, and also U.S. taxpayers whose failure to disclose their tax obligations is considered not willful in nature.
Commissioner Koskinen said, “Our aim is to get people to disclose their accounts, pay the tax they owe and get right with the government…In addition, we want to send a message to anyone who continues to willfully and aggressively evade our tax laws by hiding money overseas that they will pay a higher price for that noncompliance…because if we find you, you will face higher penalties and, as the record shows, could face criminal prosecution and jail time.”
Attorney Sanford J. Boxerman says. “The new initiative by the IRS modifies the agency’s 2012 Offshore Voluntary Disclosure Program (OVDP) and streamlines filing compliance procedures. Among other goals, today’s IRS initiative is designed to advance collection of taxes, interest and penalties from holders of overseas bank accounts and other financial assets.”
“The IRS hopes that these changes will prompt U.S. taxpayers with hidden overseas accounts to comply with their tax obligations,” says Boxerman, who focuses his practice in areas of white collar criminal defense, internal investigations; civil and criminal tax controversy; litigation; and appellate practice.
“To potentially avoid maximum penalties that may be levied by the IRS, taxpayers with undisclosed accounts should consider the options available under the newly expanded and streamlined filing process or OVDP announced today,” Boxerman advises. “A voluntary disclosure to the IRS of overseas financial assets can, in many cases, be the best way for U.S. taxpayers to potentially avoid prosecution by the U.S. government and some civil penalties as well,” says Boxerman.
“Both the IRS and the U.S. Department of Justice are making international tax evasion a much higher priority than in the past, and chasing billions of dollars in untaxed assets currently deposited at banks in about 50 countries with the help of the Foreign Account Tax Compliance Act (FATCA),” Boxerman adds.
In announcing the today’s new initiative, Commissioner Koskinen said, “The new versions of our offshore (tax compliance) programs reflect a carefully balanced approach to ensure everyone pays their fair share of taxes owed. Through the changes we are announcing today, we provide additional flexibility in key respects while maintaining the central components of our voluntary programs.”
Boxerman observes, “There had been some speculation among practitioners that the IRS might scrap the voluntary disclosure program. I think most people would view it as a good thing that the IRS has decided to change, rather than eliminate, the program.”
“My initial review tells me that the changes to the streamlined program will make it much more attractive for taxpayers who did not willfully fail to report their foreign accounts to come forward and right the ship.”
“Some of the changes to the OVDP, as opposed to the streamlined program, will make things more challenging for certain taxpayers, but for many people the OVDP will still remain a good option.”
“It’s often hard to evaluate these types of changes without seeing how they play out in real cases,” says Boxerman, “but my sense is that the changes announced today will make it a little easier for taxpayers to determine what course of action is right for them and what the consequences will likely be of various courses of action.”
Capes, Sokol, Goodman + Sarachan, P.C. in Clayton, Missouri, is a firm of seasoned attorneys, committed to achieving business and individual client objectives in the most effective and efficient manner possible. When resolution requires litigation or the skills of an innovative transactional attorney, this group of attorneys has a long and distinguished record of success.