WASHINGTON, April 26 The U.S. Internal Revenue
Service may be missing potential tax dodgers who report their
foreign accounts but who avoid paying penalties by not reporting
previous years' returns, a government watchdog said in a report
released on Friday.
To avoid steep penalties for offshore tax evasion, some
taxpayers are making "quiet disclosures" to the IRS, reporting
for the first time offshore accounts that could appear to the
IRS as newly opened accounts, according to the Government
Accountability Office (GAO), an investigative arm of Congress.
The government re-opened a voluntary amnesty program in
2009, the same year Swiss Bank UBS AG agreed to pay
$780 million to settle charges the bank was helping Americans
stash income abroad to escape U.S. taxes. It has collected $5.5
billion from about 38,000 complying taxpayers since then.
Under the program, taxpayers turn themselves in and pay a
percentage of the account balance as a fee.
Taxpayers making quiet disclosure filings, on the other
hand, would avoid paying any delinquent taxes and penalties,
unless otherwise audited, GAO said.
In its analysis of tax filings from 2003 through 2008, GAO
said it found "many more potential quiet disclosures than IRS
From 2007 through 2010, the IRS estimates taxpayers
reporting foreign accounts nearly doubled to 516,000, GAO said.
The IRS has not researched whether sharp increases in
taxpayers reporting offshore accounts for the first time is due
to efforts to escape taxes, GAO said.
Taxpayers who get away with quiet disclosures undermine the
IRS's Offshore Voluntary Disclosure Program, resulting in lost
tax revenue, GAO said.
The IRS has started analyzing the method GAO used to uncover
quiet disclosures, Steven Miller, the acting IRS commissioner,
said in a response letter to GAO accompanying the report.
"The IRS agrees that we must continue to explore additional
methods for effectively identifying quiet disclosures," Miller