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[ThatHawaiiGuy]

US offshore tax amnesty recovers only $1m

By Joshua Chaffin in Washington

Published: July 30 2003 1:28 / Last Updated: July 30 2003 1:28


The US Treasury's success at cracking down on offshore tax shelters was called into question on Tuesday after it was revealed that a much-touted amnesty programme had so far recovered less than $1m in unpaid tax.

The programme, which the Internal Revenue Service hoped would bring in $100m, has an estimated cost of $56m.

The Treasury and the IRS have recently taken aggressive steps against tax shelters, suing law and accounting firms to force them to disclose the names of customers to whom they sold dubious tax avoidance strategies.

The amnesty scheme, known as the Offshore Voluntary Compliance Initiative, was launched in January as a softer approach. Individuals who reported income they had hidden overseas and then repaid the government would face reduced penalties.

Bob Wenzel, acting head of the IRS, reported a "strong response" in May, saying more than 1,200 people had come forward. As of June 30, however, the IRS had assessed $3.3m in unpaid taxes and collected just $744,546, according to an initial review by the Treasury's inspector-general for tax administration.

[No assessment no tax owed.]

The study was cited in a letter sent on Tuesday by Senator Charles Grassley, chairman of the Senate finance committee, and Max Baucus, senior Democrat on the committee, to John Snow, Treasury secretary, urging him to take a "more vigorous approach" against tax cheats.

The IRS disputed the inspector's findings, saying the campaign had been "productive", and that it had collected about $75m as of last week through OVCI and by examining individual taxpayers. The IRS did not specify, however, how much of that money resulted directly from the programme.

Some experts have questioned whether OVCI would be effective because many of the tax dodges were criminal frauds. "This was like asking people who robbed a bank to come in and return the money," said Howard Abrams of law firm Steptoe & Johnson.



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Somebody go try and post this on RB...I'm too lazy to bother with them any more; as several folks have said: "Have removed RB from "my favorites"."