Today the Treasury Department and Internal Revenue Service announced an initiative to encourage the voluntary disclosure of unreported income hidden by taxpayers in offshore accounts and accessed through credit cards or other financial arrangements.
Under the initiative, eligible taxpayers have to pay back taxes, interest and certain accuracy and delinquency penalties, but will not face civil fraud and information return penalties. To obtain the benefits of the initiative, taxpayers must disclose information about who promoted or solicited their participation in the offshore financial arrangement.
"Treasury and the IRS are working to ensure that the IRS has the information needed to identify taxpayers who participated in these schemes. The initiative is an important step to bringing taxpayers back into compliance with the law, to stopping the promotion of these abusive schemes, and to getting the IRS information on promoters and other participants," stated Pamela Olson, Treasury Assistant Secretary for Tax Policy. "Taxpayers who do not come forward now will be pursued by the IRS and will be subject to more significant penalties and possible criminal sanctions."
"Treasury and the IRS must ensure that the IRS has the information necessary for it to fully and fairly enforce the tax laws," Olson continued. "The voluntary compliance initiative announced today will be an important source of information. The John Doe summons initiatives are another. Treasury will continue its efforts to improve and expand the U.S.'s broad network of bilateral tax treaties and tax information exchange agreements. Better tax information exchange relationships will permit the IRS to obtain the information it needs from other countries so it can pursue taxpayers attempting to hide income offshore to avoid their tax obligations."