Fueled by a crackdown on the use of overseas bank accounts as tax havens, about 7,500 people have voluntarily disclosed such accounts to the Internal Revenue Service and agreed to pay back taxes and penalties, IRS Commissioner Doug Shulman said Wednesday. Today is the deadline for taxpayers with overseas accounts to come forward under an IRS tax amnesty program.
The tax agency agreed not to pursue criminal charges against those people who apply for the amnesty program and voluntarily disclose their overseas accounts. Those taxpayers still face substantial financial penalties.
Interest in the amnesty program intensified in recent months after Switzerland’s largest bank, UBS, agreed to disclose the names of about 4,450 U.S. account holders as part of an agreement to resolve a criminal investigation by the U.S. government.
Combined with the voluntary disclosures, the IRS soon could have as many as 11,000 open investigations of individuals with overseas accounts.
Shulman said those who voluntarily stepped forward had accounts in 70 countries and “on every continent except Antarctica.”
Many of the people who applied for the program also provided information about overseas investment advisers who marketed their banks as avenues to avoid paying U.S. taxes and helped them set up overseas corporations to further insulate their wealth from the IRS, Shulman said.
The IRS intends to investigate and pursue criminal charges against those advisers, Shulman said.