The maxim “absence makes the heart grow fonder” was likely never used relative to a much-feared and widely disliked tax collection program administered by the IRS prior to its recent notation in an article written by a former government official.
That individual is ex-U.S. Department of Justice Tax Division head Caroline Caraolo. Her reference to heart warming is her way of stressing that legions of American tax filers might well come to rue rather than applaud the scheduled demise of the tax agency’s Offshore Voluntary Disclosure Program this upcoming September.
Caraolo acknowledges the sheer hatred many individuals harbored toward the OVDP. Since 2009, the program has targeted taxpayers not disclosing and paying taxes on offshore holdings. Those who have come forward voluntarily have faced punishment, but less than that which they would have otherwise faced. Reportedly, more than 56,000 Americans have come clean under the program, forking out more than $11 billion collectively to the IRS.
Caraolo stresses, though, that welcoming the OVDP’s scheduled termination with a good-riddance epitaph come September 28 is likely an illogical response for many. She believes that IRS scrutiny of suspected wrongdoers will only increase in the program’s wake, and that the agency will be “less inclined to offer a sweet deal to non-compliant taxpayers.”
Caraolo urges filers “in the shadows” to make haste in voluntarily disclosing undeclared foreign assets prior to the OVDP’s looming termination date.
The results of not doing so, she says, could be painful.