Americans Report Hidden Income Under Quiet Disclosure Agreements

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Americans Report Hidden Income Under Quiet Disclosure Agreements

by Joseph M. Donegan on May 13, 2013

The Internal Revenue Service has relied heavily on its Voluntary Offshore Disclosure Program to find tax law violators and recoup billions in hidden or unreported offshore tax funds, penalties and interest. However, a new government report reveals that the number of individuals reporting hidden income is on the rise, but some may be relying on another reporting method instead of the voluntary disclosure program.

The Government Accountability Office released new data indicating that thousands are likely relying on quiet disclosure agreements to report hidden income from foreign accounts without paying interest and penalties. Quiet disclosure agreements refer to a technique in which taxpayers attempt to avoid penalties by filing amended returns that report offshore income from previous years. As hidden income from foreign and offshore accounts can amount to billions of dollars, analysts note that quiet disclosure techniques - and the loss of interest and penalties - may lead to lost opportunities for the IRS to make progress in closing the tax gap.

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Tax

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Joseph Donegan, Scarinci Hollenbeck | Attorney Advertising

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