The Perfect Storm: Has the Tide Turned Against Offshore Tax Evasion?

The government is building momentum in its effort to turn the tide against offshore tax evasion. With the fall of Swiss bank secrecy, the rise of the Foreign Account Tax Compliance Act ("FATCA"), and an increasingly global push for cross-border transparency, we are truly entering a new era: an era marked by international cooperation. The government, with its net now cast wider than ever, is poised to haul in a big catch.

The past five years have seen an unprecedented movement towards transparency and international cooperation. A growing number of countries have signed on to information exchange agreements, such as FATCA. Super-national organizations—such as the Organization for Economic Cooperation and Development (OECD), G20 and the European Union—have pushed, with much success, for more effective disclosure agreements. Government prosecution efforts have led to the collapse of Swiss bank secrecy. The capstone on the effort has been the Internal Revenue Service's voluntary disclosure program—a program that has, by most accounts, been wildly successful, bringing forward as many as 50,000 Americans and infusing over $6.5 billion in taxes, penalties and interest back into federal coffers over the past five years.

To read more about the development of FATCA, the IRS voluntary disclosure program, and the government's war on offshore tax evasion, click here.