RESIDENCE OF PARTICIPANTS IN 2009 OVDP AND FOREIGN COUNTRIES IN WHICH DISCLOSED FINACIAL ACCOUNTS WERE LOCATED

On January 6, 2014 the U.S. Government Account Office (GAO) reported to Senator Carl Levin, Chairman, Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs, certain information about the participants in the 2009 IRS Offshore Voluntary Disclosure Program (OVDP).  The report examined the state of residence of the participants and countries in which the disclosed foreign accounts were located.

State of Residence

The subcommittee examined 10,500 original 2008 federal income tax returns filed by 2009 OVDP participants.  The three states with the largest number of participants were:

STATE (MAILING ADDRESS ON RETURN)

NUMBER OF RETURNS

SUBMITTED

PERCENT OF TOTAL SUBMISSIONS

California

2,524

24%

New York

1,844

18%

Florida

1,022

10%

The subcommittee pointed out that the states having the largest number of submissions could be due to these states having taxpayers with higher than average income and the OVDP attracting taxpayers with higher income than generally reported by the average taxpayer.

Countries in which disclosed account was located

The subcommittee also identified 12,889 FBARS that were filed for 2008 by 2009 OVDP participants.  The disclosures of foreign accounts most frequently were located in:

COUNTRIES

FBARS SUBMITTED

PERCENT

Switzerland

5,427

42%

United Kingdom

1,058

8%

Canada, France Israel,

Germany

484 to 556

4% (per country)

China, Hong Kong

394, 362 respectively

3% (per country)

Taiwan, India

307, 306 respectively

2% (per country)

The above results are not surprising as most of the indictments have come out of California, New York and Florida.  UBS was the initial target of the IRS/ DOJ offshore probe and activity has continued to focus on Swiss banks with 14 of Switzerland’s largest banks now under investigation and 106 other Swiss banks having recently agreed to cooperate with the DOJ and submit names to avert criminal investigations and possible indictments.

Although the IRS / DOJ offshore probe began in Switzerland, IRS and DOJ have extended its reach to Israel, India and other countries. Thus, U.S. persons with unreported accounts in other countries should take no solace from the initial focus on Switzerland, especially those who moved accounts from Swiss banks to Singapore or other non-Swiss financial centers to avert discovery. The IRS data-base is growing as is the likelihood of being discovered.

© 2014 by Robert S. Steinberg, Esquire
All rights reserved

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