Koskinen had said in a speech earlier this month that the programme “enhancements” would restrike the balance between enforcement and voluntary compliance.
One of the key changes to the Offshore Voluntary disclosure Program (OVDP) he has now outlined involves expanding its streamlined procedures, which have reduced penalties, to cover a “much broader group of US taxpayers we believe are out there who have failed to disclose their foreign accounts but who aren’t willfully evading their tax obligations”.
This procedure will no longer be limited to those with $1,500 or less of unpaid tax and will not require them to complete a risk questionnaire.
Taxpayers must also certify that “previous failures to comply were due to non-willful conduct,” the IRS said.
While non-wilful taxpayers outside the US will have all penalties waived, those inside the US face penalties of up to 5%.
Those who have committed 'wilful' non-compliance will not be eligible for the streamlined procedure, but they can still apply to use the OVDP.
However, the penalty here soars to 50% where the undisclosed account is held at a bank that is already being investigated by the IRS or the US Department of Justice.
This specifically covers the 106 Swiss banks which are seeking to avoid US prosecution by disclosing how they helped Americans evade taxes.
Koskinen said: "We encourage taxpayers who are concerned about their undisclosed offshore accounts to come in voluntarily before learning that the US is investigating the bank or banks where they hold accounts. By then, it will be too late to avoid the new higher penalties under the OVDP of 50% – nearly double the regular 27.5%."
