IRS Says 12,000 Tax Cheats Have Come Forward Under Program

By Bill McGuire

Sep 16, 2011 7:47am

At least 12,000 tax cheats with offshore accounts have come forward under an amnesty program that just ended, coughing up $500 million in interest, the IRS says.

“The recently completed offshore program pushed the total number of voluntary disclosures up to 30,000 since 2009,” the agency said in a statement.

The 2009 program raised $2.2 billion, but the latest amnesty has yet to collect penalties, which will add hundreds of millions more to the total. “By any measure, we are in the middle of an unprecedented period for our global international tax enforcement efforts,” IRS Commissioner Doug Shulman said in a statement. “We have pierced international bank secrecy laws, and we are making a serious dent in offshore tax evasion.”

The IRS and the Justice Department have been strong-arming banks worldwide to give up names of their U.S. clients who have offshore accounts, especially banks that do business here. Swiss bank UBS signed a deal two years ago with the United States on offshore accounts and paid $780 million.

Clients of UBS and other banks are also being prosecuted, although the IRS hasn’t released any details of the efforts. Reports in the business media indicate that perhaps a dozen banks might be prosecuted for tens of thousands of secret accounts held by U.S. citizens.

News of the deals with foreign banks likely led to so many people coming forward under this second program, avoiding criminal charges.

According to the IRS statement Thursday,  new figures showed that from the 2009 offshore program, the IRS has $2.2 billion in hand from taxes, interest and penalties, representing about 80 percent of the 2009 cases that have closed. The cases covered bank accounts in 140 countries.

“This dollar figure will grow in the months ahead,” Shulman said. “But just as importantly, we have changed the risk calculus. Americans now understand that if they try to hide assets overseas, the chances of being caught continue to increase.”

It’s unclear whether the agency will offer a third program for tax cheats to come clean.

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