30,000 Tax Cheats Confess Under IRS Programs

The IRS has created two disclosure programs where approximately 30,000 tax cheats have come clean.  The IRS has created these voluntary disclosure programs in a larger effort to identify and pursue U.S. taxpayers who avoid paying taxes by hiding assets in overseas accounts.  Efforts by the IRS began in 2009, after Swiss bank UBS AG agreed to pay a $780 million fine and turn over details of accounts of American customers who were suspected of hiding assets.

The first program, which started in 2009, had 18,000 people come clean and netted $2.2 billion in back taxes, penalties and fines from individuals with overseas accounts in 140 countries.  The more recent program has had 12,000 people come clean and already has netted $500 million for the IRS.  The benefit for these tax evaders who come clean is if they come forward now, they will usually avoid jail time as long as they agree to pay back taxes, interest and penalties.  If you are a drug dealer or a money launderer, then this program is not for you.  Only monies that were earned legally can exempt tax evaders from criminal prosecution.

Few tax evaders take advantage of this program because the penalties usually far exceed the value in the hidden accounts.  But more people should consider taking advantage of these programs.  Since 2009, the IRS has opened new enforcement offices overseas, increased staffing, and has been working with foreign law enforcement to crack down on tax evaders.  There is no doubt that the IRS will continue its efforts, especially with the financial deficit our county is currently facing.

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