Politicians targeting revenue from offshore tax evaders found tantalizing information today in a U.S. government report that suggests there are many of them out there — and they owe the government plenty of money.
During tax amnesty programs in 2009 and 2011, when penalties were reduced, “30,000 U.S. taxpayers admitted hiding assets offshore and agreed to pay billions in back taxes — a volume of tax cheating that shows how big the offshore problem is,” said Sen. Carl Levin, D-Detroit.
The findings were contained in a Government Accountability Office report on offshore tax abuse commissioned by Levin, chairman of the Senate Investigations subcommitee, and Tom Coburn, R-Okla., the ranking minority member.
One of the report’s encouraging revelations is the Internal Revenue Service has cast a wide net to track tax cheats. It has agreements with 25 foreign jurisdictions to exchange tax information on wages, bank account interest payments, royalties, capital gains and other remuneration. The IRS receives more than 2 million “data items” yearly.
“The bad news,” Levin said, “is that the IRS initiates only a couple hundred specific requests for taxpayer information per year from other countries.”
A more aggressive pursuit of taxes owed by Americans on offshore income is one of the measures Levin has proposed to the Joint Select Committee on Deficit Reduction. The Subcommittee estimates that offshore tax abuse costs the U.S. Treasury $100 billion in lost revenue each year. With the Supercommittee tasked to find more than $1 trillion in savings or revenue, every bit helps.