WASHINGTON — Internal Revenue Service Commissioner Doug Shulman said Thursday the tax service is “putting a big dent in offshore tax evasion” as part of its plan to focus on large businesses.
“We upped the ante in a meaningful way with our work on Swiss financial institutions, where for the first time in history, a bank secrecy jurisdiction turned over thousands of names and account numbers,” Shulman said.
Shulman, speaking at the National Press Club, said a focus on international tax compliance must be a mandate for the IRS moving forward. He said the agency is “upping our game in the large business arena, particularly as it relates to international tax issues.”
The IRS chief, who is in the final year of a five-year term, said another focus for the agency is to encourage taxpayers to come forward and voluntarily pay taxes to avoid going to jail. The IRS does this by mining the information it receives, launching investigations on banks and taxpayers and giving them a chance to pay, Shulman said.
Through the end of 2011, approximately 33,000 people came forward and paid back taxes, amounting to more than $4.4 billion.
Earlier this year the IRS announced an expansion of its “Fresh Start” initiative to help struggling taxpayers by providing new penalty relief to the unemployed and making installment agreements available to more people. Now some taxpayers who have been unemployed for 30 days or longer will be able to avoid failure-to-pay penalties.
Shulman also used the appearance to tout “innovation” at the IRS, especially in the way the agency interacts with tax payers and tax preparers.
That includes actions like creating the agency’s first smartphone app, the IRS2Go, which allows users to track a tax refund – the app is now available to download for both iPhone and Android smartphones – and making electronic filing easier. Shulman referred to e-filing as “one of the most successful modernization programs in government.”
The e-filing rate was 77% last year, compared with the 16% from 15 years ago. Filing electronically means taxpayers get refunds faster with fewer errors, Shulman said. It also saves the IRS money: it costs 15 cents to process an electronic return, compared with the $3.50 to file a paper return.
Finally, Shulman implored Congress to do something about the current tax code without waiting for the presidential election. A host of tax breaks expire at the end of the year, and many political analysts expect tax rates will be debated during the lame-duck session after the election.
“If Congress doesn’t act until the end of the year, you could have a real disaster in the filing season where some people are filing under one law and another under another law,” Shulman said in response to a question.
“We’re hopeful these pieces of legislation will pass sooner than later.”