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IRS's Voluntary Disclosure Program for Offshore Accounts: A Critical Assessment After One Year

by Mark Matthews
Caplin & Drysdale, Chartered - Washington Office

Scott D. Michel
Caplin & Drysdale, Chartered - Washington Office

September 22, 2010

Previously published by BNA Insights on September 21, 2010

Exactly one year ago, the tax world watched as the Internal Revenue Service conducted what may have been the most extraordinarily successful tax compliance feat in American history. Earlier that year, senior prosecutors in the Tax Division of the Department of Justice, working with IRS, breached the generations-old wall of bank secrecy in Switzerland, sending a clear signal to Americans with undeclared foreign accounts that they are at serious risk of their previously sacrosanct bank account records being turned over to U.S. authorities. The DOJ-IRS enforcement initiative in Switzerland was successful on multiple fronts. CID's initiative artfully aligned the interests of IRS, taxpayers, and practitioners in encouraging compliance in an efficient and effective manner, and by any measure, CID's achievement ranks in the upper tier of tax compliance successes ever implemented. A year later, the mood in the tax community concerning the OVDI has soured somewhat as a result of how the OVDI cases are being handled in their civil phases, and the offshore enforcement program has lost momentum, just at the moment when IRS had maximum opportunity to exploit and expand its early success.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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