Page 1 GAO-14-265R IRS’s Offshore Voluntary Disclosure Program

441 G St. N.W.

Washington, DC 20548

January 6, 2014

The Honorable Carl Levin

Chairman, Permanent Subcommittee on Investigations

Committee on Homeland Security and Governmental Affairs

United States Senate

Subject: IRS’s Offshore Voluntary Disclosure Program: 2009 Participation by State and 

Location of Foreign Bank Accounts

Dear Mr. Chairman: 

This letter transmits information you requested on participants in the Internal Revenue Service’s 

(IRS) 2009 Offshore Voluntary Disclosure Program (OVDP), which offered incentives for 

taxpayers to disclose their offshore accounts and pay delinquent taxes, interest and penalties. 

Generally, the program offered somewhat reduced penalties and no risk of criminal prosecution, 

if eligible taxpayers fully disclosed their previously unreported offshore accounts, and paid taxes 

due plus interest. 

Specifically, included is participation data by state and location of foreign bank accounts. This 

information supplements our March 2013 report.1

 

To provide this information, we used analyses from our March 2013 report that were based on 

six years of tax return data from all 2009 OVDP participants. For the purposes of this review, we 

determined the data used in our analyses to be reliable. Our data reliability assessment 

included reviewing relevant documentation, interviewing IRS officials knowledgeable about the 

data, and testing the data electronically to identify obvious errors or outliers. 

We conducted this performance audit from June 2011 to March 2013 in accordance with 

generally accepted government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our audit objectives.

2009 Offshore Voluntary Disclosure Program Participants by State 

For our March 2013 report, we identified approximately 10,500 original 2008 tax returns filed by 

2009 OVDP participants. We reviewed the state listed in the mailing address field of these 

returns. This mailing address may not necessarily reflect the state of residence of the taxpayers. 

As IRS notes when it publishes data on taxpayers by state, “some taxpayers may have used the 

address of a tax lawyer, or accountant, or the address of a place of business; moreover, such 

addresses could each have been located in a state other than the state in which the taxpayer 

 

1 GAO, Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion, GAO13-318 (Washington, D.C.: Mar. 27, 2013). 
Page 2 GAO-14-265R IRS’s Offshore Voluntary Disclosure Program

resided.”2 The geographic distribution of OVDP participants by state could be a consequence of 

taxpayer demographics. For example, OVDP participants generally reported higher incomes 

than the average taxpayer; and many of the states that seemed to appear more frequently in the 

OVDP population are generally higher-income states. Table 1 lists the number of 2008 tax 

returns filed by 2009 OVDP participants by state mailing address. To safeguard taxpayer 

identities, we suppressed the totals for any state with fewer than 10 OVDP participants. 

 

2 IRS footnote to Historical Table 2, Individual Income and Tax Data, by State and Size of Adjusted Gross Income, 

Tax Year 2008.
Page 3 GAO-14-265R IRS’s Offshore Voluntary Disclosure Program

Table 1: 2009 Offshore Voluntary Disclosure Program Participants by State 

2008 tax return mailing address Frequency Percent

Alabama 26 <1%

Alaska 20 <1%

Arizona 146 1%

Arkansas 17 <1%

California 2,524 24%

Colorado 139 1%

Connecticut 210 2%

Delaware 17 <1%

District of Columbia 49 a <1%

Florida 1,022 10%

Georgia 143 1%

Hawaii 59 1%

Idaho 11 <1%

Illinois 291 3%

Indiana 47 <1%

Iowa 17 <1%

Kansas 22 <1%

Kentucky 24 <1%

Louisiana 39 <1%

Maine 25 <1%

Maryland 203 2%

Massachusetts 307 3%

Michigan 129 1%

Minnesota 59 1%

Mississippi 11 <1%

Missouri 57 1%

Montana — b —

Nebraska 11 <1%

Nevada 97 1%

New Hampshire 40 <1%

New Jersey 631 6%

New Mexico 31 <1%

New York 1,844 18%

North Carolina 125 1%

North Dakota — b —

Ohio 159 2%

Oklahoma 17 <1%

Oregon 58 1%

Pennsylvania 269 3%

Rhode Island 25 <1%

South Carolina 50 <1%
Page 4 GAO-14-265R IRS’s Offshore Voluntary Disclosure Program

South Dakota — b — 

Tennessee 48 <1%

Texas 512 5%

Utah 26 <1%

Vermont 26 <1%

Virginia 184 2%

Washington 231 2%

West Virginia — b — 

Wisconsin 49 <1%

Wyoming — b —

Subtotal of suppressed states 29 b <1%

Other addresses 457 a,c 4%

TOTAL 10,533 100%

Source: GAO analysis of IRS’s Individual Returns Transaction File

a We follow IRS’s convention that reports the District of Columbia and “other addresses” in tables that report tax 

return data by state. 

b To safeguard taxpayer identities, we are suppressing the totals for any state with fewer than 10 OVDP 

participants.

c 

Locations of Foreign Bank Accounts Reported by 2009 Offshore Voluntary Disclosure 

Program Participants 

Other addresses include, for example, returns filed (1) from Army Post Office and Fleet Post Office addresses 

by members of the armed forces stationed overseas; (2) by other U.S. citizens abroad; and (3) by residents of 

Puerto Rico with income from sources outside Puerto Rico or with income earned as U.S. government 

employees.

We identified 12,889 Report of Foreign Bank and Financial Accounts (FBAR) forms that were 

filed for 2008 by 2009 OVDP participants.

3 We searched the financial institution mailing address 

data reported on these FBARs using country/territory codes from the Financial Crimes 

Enforcement Network (FinCEN).

4 We then derived the list of frequencies for countries/territories 

reported in table 2. Consistent with IRS’s enforcement efforts and the design of the 2009 OVDP, 

we found that the population of participants was more likely to report offshore accounts in 

Switzerland than other locations. Note that each FBAR could report multiple financial accounts 

and multiple financial institution mailing addresses. In our review of a sample of 2009 OVDP 

case files, we found that some participants disclosed dozens of offshore accounts with multiple 

banks and in multiple countries; in other cases, participants disclosed only one account. When 

reporting the geographic distribution of offshore accounts, we counted the number of FBARs in 

which a specific country/territory code appeared at least once. To safeguard taxpayer identities, 

we are not reporting the names of any country or territory that appeared less than 10 times. 

 

3 The Bank Secrecy Act requires that U.S. taxpayers file a form TD F 90-22.1 FBAR if they have a financial interest in 

or signature authority over offshore accounts with an aggregate value exceeding $10,000. The Secretary of the 

Treasury set this threshold. 31 U.S.C. § 5314; 31 C.F.R. § 1010.350. 

4 FinCEN is a bureau of the U.S. Department of the Treasury. FBAR forms are processed by the IRS, but FBAR 

information is managed by Treasury’s FinCEN. The FinCEN January 2009 list of standard state/country codes is 

available at http://www.fincen.gov/forms/files/country_and_state_codes.pdf. 
Page 5 GAO-14-265R IRS’s Offshore Voluntary Disclosure Program

Table 2: Locations of Foreign Bank Accounts Reported on Report of Foreign Bank and 

Financial Accounts (FBAR) Forms by 2009 Offshore Voluntary Disclosure Program 

Participants

Country or territory Frequency Percent 

Switzerland

a

5,427 42%

United Kingdom 1,058 8%

Canada 556 4%

France 528 4%

Israel 510 4%

Germany 484 4%

China 394 3%

Hong Kong 362 3%

Taiwan 307 2%

India 306 2%

Italy 189 1%

Luxembourg 174 1%

Australia 161 1%

Singapore 156 1%

Cayman Islands 148 1%

Liechtenstein 142 1%

Netherlands 121 1%

Austria 116 1%

Ireland 110 1%

Sweden 107 1%

Belgium 106 1%

Mexico 102 1%

Isle of Man (UK) 90 1%

South Korea 86 1%

Japan 83 1%

Spain 82 1%

South Africa 81 1%

Jersey (UK) 72 1%

New Zealand 72 1%

Bahamas 69 1%

Brazil 59 <1%

Thailand 54 <1%

Bermuda 52 <1%

Denmark 52 <1%

Norway 50 <1%

Greece 49 <1%

Virgin Islands (British) 49 <1%

Monaco 45 <1%

Panama 44 <1%

Philippines 39 <1%
Page 6 GAO-14-265R IRS’s Offshore Voluntary Disclosure Program

Costa Rica 33 <1%

Netherlands (Antilles) 32 <1%

Colombia 29 <1%

Turkey 29 <1%

Guernsey 26 <1%

Hungary 25 <1%

Malaysia 25 <1%

United Arab Emirates 22 <1%

Jamaica 20 <1%

Dominican Republic 18 <1%

Lebanon 18 <1%

Poland 18 <1%

Venezuela 18 <1%

Chile 15 <1%

Cyprus 15 <1%

Finland 15 <1%

Antigua & Barbuda 14 <1%

Argentina 14 <1%

Iran 14 <1%

Portugal 14 <1%

Russia 14 <1%

Egypt 13 <1%

Uruguay 13 <1%

Sri Lanka 12 <1%

Guatemala 12 <1%

Czech Republic 11 <1%

Pakistan 11 <1%

Saint Kitts & Nevis 10 <1%

Source: GAO analysis of FinCEN data

a Percent refers to the percentage of the 12,889 FBARs filed by 2009 OVDP participants for 2008 that reported 

at least one financial account with a mailing address in that country. For example, 5,427 of the 12,889 FBARs 

(or 42%) reported at least one foreign bank account in Switzerland. There were 21, 2-digit codes that appeared 

a total of 113 times, but did not match any country/territory codes on the FinCEN list. 

We provided the information included in this product to IRS for technical review, and IRS did not 

identify any suggested changes.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we 

plan no further distribution until 30 days from the report date. At that time, we will send copies of 

the report to the Chairmen and Ranking Members of other Senate and House committees and 

subcommittees with appropriation, authorization, and oversight responsibilities for IRS. We are 

also sending copies to the Commissioner of Internal Revenue, the Secretary of the Treasury, 

the Chairman of the IRS Oversight Board, and the Deputy Director for Management of the 

Office of Management and Budget. In addition, the report will be available at no charge on the 

GAO website at http://www.gao.gov. 
Page 7 GAO-14-265R IRS’s Offshore Voluntary Disclosure Program

If you or your staff have any questions or wish to discuss the material in this report further, 

please contact me at (202) 512-9110 or at whitej@gao.gov. Contact points for our offices of 

Congressional Relations and Public Affairs may be found on the last page of this report. Major 

contributors to this report were Tara Carter, Mark Kehoe, Libby Mixon, and Andrew Stephens. 

Sincerely yours, 

James R. White

Director, Tax Issues

Strategic Issues

(451081)
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