IRS Collects Half a Billion Dollars from OVDI

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As another feather in the IRS’ cap, the recently concluded Offshore Voluntary Disclosure Initiative (OVDI) amnesty program has netted in at least half a billion dollars in taxes. The OVDI is a program where taxpayers with assets in overseas bank accounts are given a period of time to declare them in exchange for a waiver of criminal charges against them. Punishment in the form of penalties, interests and fines will still be meted out, though. About 12,000 taxpayers have participated in the program this time, stepping forward to declare taxable income stashed in offshore bank accounts and other financial instruments.

In 2009, the same amnesty program drew participation from about 15,000 taxpayers as part of the IRS’ efforts to weed out tax evaders who use offshore bank accounts to hide their money. The 12,000 who took part this year would be subjected to a higher penalty compared to those two years ago. This year, the IRS added a penalty equal to 25% of the highest balance of the overseas account from 2003 to 2010. This is over and above the fine of repaying as much as eight years of back taxes.

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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.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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