The US Internal Revenue Service (IRS) has netted more than $10 billion in secret offshore cash and investments.
The controversial Foreign Account Tax Compliance Act (FATCA) has encouraged more than 100,000 taxpayers to reveal their overseas holdings.
But the IRS suggests this is just the start as FATCA cranks up to swap financial information with more than 100 other countries.
So far, 55,800 US taxpayers have told the IRS about previously undeclared wealth and have handed over $9.9 billion in taxes through the Offshore Voluntary Disclosure Program (OVDP).
Another 48,000 taxpayers have joined the Streamlined Program – at a cost of $450 million in tax, penalties and interest.
100,000 taxpayers admit hiding wealth
FATCA has also seen another 96,000 taxpayers volunteer to amend or file late tax returns.
IRS Commissioner John Koskinen said: “The IRS has passed several major milestones in our offshore efforts, collecting a combined $10 billion with 100,000 taxpayers coming back into compliance.
“As we continue to receive more information on foreign accounts, people’s ability to avoid detection becomes harder and harder. The IRS continues to urge those people with international tax issues to come forward to meet their tax obligations.”
The IRS stresses that US taxpayers can hold cash and investments overseas, but any money earned from them must be declared.
FATCA has also seen more than 200,000 foreign banks rush to register as compliant with the tax network.
Sever penalties for non-disclosure
US taxpayers living in the States with more than $50,000 in offshore accounts will have their financial information reported to the IRS.
US expats have a higher limit – $200,000 – before a report is despatched.
Banks have a choice – ditch clients who are US taxpayers to remain outside the program or comply with the law. If they do not, the IRS can impose a 30% withholding tax on the bank’s US dollar transactions or freeze the institution out of the US financial system.
FATCA has also seen secretive Swiss banks throw open their doors to US tax investigators after UBS paid $780 million for illegally helping US clients evade taxes. Other banks also paid fines and some even closed.
The law was introduced to howls of protest in 2010, but did not come into force until 2014.