IRS Continues Crackdown On Offshore Tax Cheating

IRS
The IRS will end a program giving amnesty to tax cheats with overseas accounts who ‘fess up.

The IRS later this month will end a program allowing tax evaders with secret offshore accounts to confess and avoid prison.

The IRS made the decision to shut down the program following declining demand. According to Fox Business, the agency will continue a program that helps people who have unwittingly failed to report assets.

But those decision don’t mean the IRS will stop stepped-up enforcement of offshore tax cheating that began following the 2008 financial crisis.

According to the Wall Street Journal:

Before 2008, an American citizen could often walk into a Swiss bank, deposit millions of dollars, and walk out confident that the funds were safe and hidden from Uncle Sam, says Mark Matthews, a lawyer with Caplin & Drysdale who formerly headed the IRS’s criminal division.

Now, he says, “Americans hiding money abroad have to go to small islands with sketchy advisers and less reliable financial systems.”

The reason: a historic crackdown on the longstanding problem of U.S. taxpayers hiding money offshore. U.S. officials ramped it up after a whistleblower revealed that some Swiss banks saw U.S. evasion as a profit center and were sending bankers onto U.S. soil to hunt for clients.

The beginning of the crackdown came in 2008, when the Justice Department took UBS AG to court. In 2009, the Swiss banking giant paid $780 million and agreed to turn over information on hundreds of U.S. customers to avoid criminal prosecution. Since then, prosecutors have repeated the formula with other institutions.

According to the Journal:

Current and would-be tax cheats should take seriously the IRS’s vow to keep pursuing secret offshore accounts, says Bryan Skarlatos, a criminal tax lawyer with Kostelanetz & Fink who has handled more than 1,500 offshore disclosures to the IRS.

Although the IRS’s staffing is way down, he says, the agency and the Justice Department have far better tools for detecting and combating evasion than 10 years ago.

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