Tax evasion by the wealthy and large corporations amounts to billions in lost revenue for the Treasury each year. The U.S. government, looking to increase revenue, is now going after taxpayers who do not fulfil their tax obligations by hiding assets overseas. Apple Inc. is currently in the news for evading billions in taxes by exploiting the U.S. tax code, along with other top multi-national companies.
In an effort to curb tax evasion and recover billions in tax money, U.S. authorities are in talks with Swiss authorities to share the financial information of U.S. taxpayers who have assets hidden in various Swiss banks. The deal will be done soon. The IRS is using the Foreign Account Tax Compliance Act (FATCA) to introduce greater transparency, and make it difficult for U.S. taxpayers to hide assets in overseas bank accounts.
Taxpayers who have hidden assets in offshore banks can get back into compliance without facing a heavy penalty and/or imprisonment under the Offshore Voluntary Disclosure Program (OVDP). Due to the success of earlier OVDP programs, the IRS is running the program again in order to help taxpayers become current with their taxes without facing strict punishments.
The efforts of the government are expected to bring billions in taxes and curb tax evasion to a large extent. As the Obama administration is looking at every opportunity to increase revenue, bringing down tax evasion should serve the dual purpose of increasing revenue and improving compliance.