US taxpayers that are using the IRS’s OVDP (Offshore Voluntary Disclosure Programme) number has increased to 85,000 generating almost US$8 billion in extra revenue since the launch in 2009.
The figures have risen since the latest progress report of the IRS in January this year, when it was announced that the OVDP schemes had attracted almost 54,000 disclosures and US$7 billion in tax. That was the point where the IRS has decided that the programme was indeed helpful and was to be left open forever.
Nonetheless, it is believed that most of the additional taxpayers who have volunteered since then, have been attracted by the streamlined programme that was launched in June 2014 for non-wilful defaulters. This programme stemmed from the IRS’ recognition that there were large numbers of US taxpayers whose non-compliance with the offshore reporting rules was entirely accidental, and who could be drawn into compliance by offering them immunity from any penalties. It appears that this strategy has succeeded, even though the advent of the FATCA has provided additional encouragement.
‘These statistics demonstrate overwhelming interest in the streamlined procedures, while applications for the formal OVDP spear to be waning. The overwhelming success of both the OVDP and the streamlined programme is unquestionably attributable to the US government’s use of a traditional carrot and stick approach.’
– Matthew Lee of US law firm Blank Rome LLP.