Daily Tax Update - April 26, 2013: GAO Releases Report on Offshore Tax Evasion

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS MAY 6

GAO RELEASES REPORT ON OFFSHORE TAX EVASION:  The General Accountability Office (GAO) has released a report on offshore tax evasion titled, “IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion.”  The report states, “IRS has detected some taxpayers with previously undisclosed offshore accounts attempting to circumvent paying the taxes, interest, and penalties that would otherwise be owed, but based on GAO reviews of IRS data, IRS may be missing attempts by other taxpayers attempting to do so. GAO analyzed amended returns filed for tax year 2003 through tax year 2008, matched them to other information available to IRS about taxpayers' possible offshore activities, and found many more potential quiet disclosures than IRS detected. Moreover, IRS has not researched whether sharp increases in taxpayers reporting offshore accounts for the first time is due to efforts to circumvent monies owed, thereby missing opportunities to help ensure compliance. From tax year 2007 through tax year 2010, IRS estimates that the number of taxpayers reporting foreign accounts nearly doubled to 516,000. Taxpayer attempts to circumvent taxes, interest, and penalties by not participating in an offshore program, but instead simply amending past returns or reporting on current returns previously unreported offshore accounts, result in lost revenues and undermine the programs' effectiveness.”

Among other things, “GAO recommends that IRS (1) use offshore data to identify and educate taxpayers who might not be aware of their reporting requirements; (2) explore options for employing a methodology to more effectively detect and pursue quiet disclosures and implement the best option; and (3) analyze first-time offshore account reporting trends to identify possible attempts to circumvent monies owed and take action to help ensure compliance. IRS agreed with all of GAO's recommendations.”

View Report (PDF, 72 pages)

TAX BILLS INTRODUCED APRIL 25:

1. [113rd] H.R.1723 : To amend the Internal Revenue Code of 1986 to impose increased rates of tax with respect to taxpayers with more than $1,000,000 taxable income, and for other purposes.
Sponsor: Rep Schakowsky, Janice D. [IL-9] (introduced 4/25/2013)      Cosponsors (6) 
Committees: House Ways and Means 
Latest Major Action: 4/25/2013 Referred to House committee. Status: Referred to the House Committee on Ways and Means.


2. [113rd] H.R.1737 : To amend the Internal Revenue Code of 1986 to allow manufacturing businesses to establish tax-free manufacturing reinvestment accounts to assist them in providing for new equipment and facilities and workforce training.
Sponsor: Rep DeLauro, Rosa L. [CT-3] (introduced 4/25/2013)      Cosponsors(8) 
Committees: House Ways and Means 
Latest Major Action: 4/25/2013 Referred to House committee. Status: Referred to the House Committee on Ways and Means.


3. [113rd] H.R.1738 : To amend the Internal Revenue Code of 1986 to extend and modify the American Opportunity Tax Credit, and for other purposes.
Sponsor: Rep Doggett, Lloyd [TX-35] (introduced 4/25/2013)      Cosponsors(72) 
Committees: House Ways and Means 
Latest Major Action: 4/25/2013 Referred to House committee. Status: Referred to the House Committee on Ways and Means.


4. [113rd] S.826 : A bill to amend the Internal Revenue Code of 1986 to reform and enforce taxation of tobacco products.
Sponsor: Sen Lautenberg, Frank R. [NJ] (introduced 4/25/2013)      Cosponsors (3) 
Committees: Senate Finance 
Latest Major Action: 4/25/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.


5. [113rd] S.827 : A bill to amend the Internal Revenue Code of 1986 to require oil polluters to pay the full cost of oil spills, and for other purposes.
Sponsor: Sen Menendez, Robert [NJ] (introduced 4/25/2013)      Cosponsors(4) 
Committees: Senate Finance 
Latest Major Action: 4/25/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.


6. [113rd] S.835 : A bill to amend the Internal Revenue Code of 1986 to extend and modify the American Opportunity Tax Credit, and for other purposes.
Sponsor: Sen Schumer, Charles E. [NY] (introduced 4/25/2013)      Cosponsors (7) 
Committees: Senate Finance 
Latest Major Action: 4/25/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.


7. [113rd] S.836 : A bill to amend the Internal Revenue Code of 1986 to strengthen the earned income tax credit and make permanent certain tax provisions under the American Recovery and Reinvestment Act of 2009.
Sponsor: Sen Brown, Sherrod [OH] (introduced 4/25/2013)      Cosponsors(29) 
Committees: Senate Finance 
Latest Major Action: 4/25/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.


8. [113rd] S.838 : A bill to amend the Internal Revenue Code of 1986 to protect employees in the building and construction industry who are participants in multiemployer plans, and for other purposes.
Sponsor: Sen McCaskill, Claire [MO] (introduced 4/25/2013)      Cosponsors(1) 
Committees: Senate Finance 
Latest Major Action: 4/25/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.