This is the accessible text file for GAO report number GAO-14-265R entitled 'IRS's Offshore Voluntary Disclosure Program: 2009 Participation by State and Location of Foreign Bank Accounts' which was released on February 19, 2014. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. 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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.[Footnote 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: Table 1: 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 resided."[Footnote 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. Table 1: 2009 Offshore Voluntary Disclosure Program Participants by State: 2008 tax return mailing address: Alabama; Frequency: 26; Percent: less than 1%. 2008 tax return mailing address: Alaska; Frequency: 20; Percent: less than 1%. 2008 tax return mailing address: Arizona; Frequency: 146; Percent: 1%. 2008 tax return mailing address: Arkansas; Frequency: 17; Percent: less than 1%. 2008 tax return mailing address: California; Frequency: 2,524; Percent: 24%. 2008 tax return mailing address: Colorado; Frequency: 139; Percent: 1%. 2008 tax return mailing address: Connecticut; Frequency: 210; Percent: 2%. 2008 tax return mailing address: Delaware; Frequency: 17; Percent: less than 1%. 2008 tax return mailing address: District of Columbia[A]; Frequency: 49; Percent: less than 1%. 2008 tax return mailing address: Florida; Frequency: 1,022; Percent: 10%. 2008 tax return mailing address: Georgia; Frequency: 143; Percent: 1%. 2008 tax return mailing address: Hawaii; Frequency: 59; Percent: 1%. 2008 tax return mailing address: Idaho; Frequency: 11; Percent: less than 1%. 2008 tax return mailing address: Illinois; Frequency: 291; Percent: 3%. 2008 tax return mailing address: Indiana; Frequency: 47; Percent: less than 1%. 2008 tax return mailing address: Iowa; Frequency: 17; Percent: less than 1%. 2008 tax return mailing address: Kansas; Frequency: 22; Percent: less than 1%. 2008 tax return mailing address: Kentucky; Frequency: 24; Percent: less than 1%. 2008 tax return mailing address: Louisiana; Frequency: 39; Percent: less than 1%. 2008 tax return mailing address: Maine; 25; Percent: less than 1%. 2008 tax return mailing address: Maryland; Frequency: 203; Percent: 2%. 2008 tax return mailing address: Massachusetts; Frequency: 307; Percent: 3%. 2008 tax return mailing address: Michigan; Frequency: 129; Percent: 1%. 2008 tax return mailing address: Minnesota; Frequency: 59; Percent: 1%. 2008 tax return mailing address: Mississippi; Frequency: 11; Percent: less than 1%. 2008 tax return mailing address: Missouri; Frequency: 57; Percent: 1%. 2008 tax return mailing address: Montana[B]; Frequency: [Empty]; Percent: [Empty]. 2008 tax return mailing address: Nebraska; Frequency: 11; Percent: less than 1%. 2008 tax return mailing address: Nevada; Frequency: 97; Percent: 1%. 2008 tax return mailing address: New Hampshire; Frequency: 40; Percent: less than 1%. 2008 tax return mailing address: New Jersey; Frequency: 631; Percent: 6%. 2008 tax return mailing address: New Mexico; Frequency: 31; Percent: less than 1%. 2008 tax return mailing address: New York; Frequency: 1,844; Percent: 18%. 2008 tax return mailing address: North Carolina; Frequency: 125; Percent: 1%. 2008 tax return mailing address: North Dakota[B]; Frequency: [Empty]; Percent: [Empty]. 2008 tax return mailing address: Ohio; Frequency: 159; Percent: 2%. 2008 tax return mailing address: Oklahoma; Frequency: 17; Percent: less than 1%. 2008 tax return mailing address: Oregon; Frequency: 58; Percent: 1%. 2008 tax return mailing address: Pennsylvania; Frequency: 269; Percent: 3%. 2008 tax return mailing address: Rhode Island; Frequency: 25; Percent: less than 1%. 2008 tax return mailing address: South Carolina; Frequency: 50; Percent: less than 1%. 2008 tax return mailing address: South Dakota[B]; Frequency: [Empty]; Percent: [Empty]. 2008 tax return mailing address: Tennessee; Frequency: 48; Percent: less than 1%. 2008 tax return mailing address: Texas; Frequency: 512; Percent: 5%. 2008 tax return mailing address: Utah; Frequency: 26; Percent: less than 1%. 2008 tax return mailing address: Vermont; Frequency: 26; Percent: less than 1%. 2008 tax return mailing address: Virginia; Frequency: 184; Percent: 2%. 2008 tax return mailing address: Washington; Frequency: 231; Percent: 2%. 2008 tax return mailing address: West Virginia[B]; Frequency: [Empty]; Percent: [Empty]. 2008 tax return mailing address: Wisconsin; Frequency: 49; Percent: less than 1%. 2008 tax return mailing address: Wyoming[B]; Frequency: [Empty]; Percent: [Empty]. Subtotal of suppressed states [B]: Frequency: 29; Percent: less than 1%. Other addresses [A,C]: Frequency: 457; Percent: 4%. Total: Frequency: 10,533; Percent: 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] 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. [End of table] Locations of Foreign Bank Accounts Reported by 2009 Offshore Voluntary Disclosure Program Participants: We identified 12,889 Report of Foreign Bank and Financial Accounts (FBAR) forms that were filed for 2008 by 2009 OVDP participants. [Footnote 3] We searched the financial institution mailing address data reported on these FBARs using country/territory codes from the Financial Crimes Enforcement Network (FinCEN).[Footnote 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. 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: Switzerland; Frequency: 5,427; Percent[A]: 42%. Country or territory: United Kingdom; Frequency: 1,058; Percent[A]: 8%. Country or territory: Canada; Frequency: 556; Percent[A]: 4%. Country or territory: France; Frequency: 528; Percent[A]: 4%. Country or territory: Israel; Frequency: 510; Percent[A]: 4%. Country or territory: Germany; Frequency: 484; Percent[A]: 4%. Country or territory: China; Frequency: 394; Percent[A]: 3%. Country or territory: Hong Kong; Frequency: 362; Percent[A]: 3%. Country or territory: Taiwan; Frequency: 307; Percent[A]: 2%. Country or territory: India; Frequency: 306; Percent[A]: 2%. Country or territory: Italy; Frequency: 189; Percent[A]: 1%. Country or territory: Luxembourg; Frequency: 174; Percent[A]: 1%. Country or territory: Australia; Frequency: 161; Percent[A]: 1%. Country or territory: Singapore; Frequency: 156; Percent[A]: 1%. Country or territory: Cayman Islands; Frequency: 148; Percent[A]: 1%. Country or territory: Liechtenstein; Frequency: 142; Percent[A]: 1%. Country or territory: Netherlands; Frequency: 121; Percent[A]: 1%. Country or territory: Austria; Frequency: 116; Percent[A]: 1%. Country or territory: Ireland; Frequency: 110; Percent[A]: 1%. Country or territory: Sweden; Frequency: 107; Percent[A]: 1%. Country or territory: Belgium; Frequency: 106; Percent[A]: 1%. Country or territory: Mexico; Frequency: 102; Percent[A]: 1%. Country or territory: Isle of Man (UK); Frequency: 90; Percent[A]: 1%. Country or territory: South Korea; Frequency: 86; Percent[A]: 1%. Country or territory: Japan; Frequency: 83; Percent[A]: 1%. Country or territory: Spain; Frequency: 82; Percent[A]: 1%. Country or territory: South Africa; Frequency: 81; Percent[A]: 1%. Country or territory: Jersey (UK); Frequency: 72; Percent[A]: 1%. Country or territory: New Zealand; Frequency: 72; Percent[A]: 1%. Country or territory: Bahamas; Frequency: 69; Percent[A]: 1%. Country or territory: Brazil; Frequency: 59; Percent[A]: less than 1%. Country or territory: Thailand; Frequency: 54; Percent[A]: less than 1%. Country or territory: Bermuda; Frequency: 52; Percent[A]: less than 1%. Country or territory: Denmark; Frequency: 52; Percent[A]: less than 1%. Country or territory: Norway; Frequency: 50; Percent[A]: less than 1%. Country or territory: Greece; Frequency: 49; Percent[A]: less than 1%. Country or territory: Virgin Islands (British); Frequency: 49; Percent[A]: less than 1%. Country or territory: Monaco; Frequency: 45; Percent[A]: less than 1%. Country or territory: Panama; Frequency: 44; Percent[A]: less than 1%. Country or territory: Philippines; Frequency: 39; Percent[A]: less than 1%. Country or territory: Costa Rica; Frequency: 33; Percent[A]: less than 1%. Country or territory: Netherlands (Antilles); Frequency: 32; Percent[A]: less than 1%. Country or territory: Colombia; Frequency: 29; Percent[A]: less than 1%. Country or territory: Turkey; Frequency: 29; Percent[A]: less than 1%. Country or territory: Guernsey; Frequency: 26; Percent[A]: less than 1%. Country or territory: Hungary; Frequency: 25; Percent[A]: less than 1%. Country or territory: Malaysia; Frequency: 25; Percent[A]: less than 1%. Country or territory: United Arab Emirates; Frequency: 22; Percent[A]: less than 1%. Country or territory: Jamaica; Frequency: 20; Percent[A]: less than 1%. Country or territory: Dominican Republic; Frequency: 18; Percent[A]: less than 1%. Country or territory: Lebanon; Frequency: 18; Percent[A]: less than 1%. Country or territory: Poland; Frequency: 18; Percent[A]: less than 1%. Country or territory: Venezuela; Frequency: 18; Percent[A]: less than 1%. Country or territory: Chile; Frequency: 15; Percent[A]: less than 1%. Country or territory: Cyprus; Frequency: 15; Percent[A]: less than 1%. Country or territory: Finland; Frequency: 15; Percent[A]: less than 1%. Country or territory: Antigua & Barbuda; Frequency: 14; Percent[A]: less than 1%. Country or territory: Argentina; Frequency: 14; Percent[A]: less than 1%. Country or territory: Iran; Frequency: 14; Percent[A]: less than 1%. Country or territory: Portugal; Frequency: 14; Percent[A]: less than 1%. Country or territory: Russia; Frequency: 14; Percent[A]: less than 1%. Country or territory: Egypt; Frequency: 13; Percent[A]: less than 1%. Country or territory: Uruguay; Frequency: 13; Percent[A]: less than 1%. Country or territory: Sri Lanka; Frequency: 12; Percent[A]: less than 1%. Country or territory: Guatemala; Frequency: 12; Percent[A]: less than 1%. Country or territory: Czech Republic; Frequency: 11; Percent[A]: less than 1%. Country or territory: Pakistan; Frequency: 11; Percent[A]: less than 1%. Country or territory: Saint Kitts & Nevis; Frequency: 10; Percent[A]: less than 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. [End of table] 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 [hyperlink, http://www.gao.gov]. 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, Signed by: James R. White: Director, Tax Issues: Strategic Issues: [End of section] Footnotes: [1] GAO, Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion, [hyperlink, http://www.gao.gov/products/GAO-13-318] (Washington, D.C.: Mar. 27, 2013). [2] IRS footnote to Historical Table 2, Individual Income and Tax Data, by State and Size of Adjusted Gross Income, Tax Year 2008. [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 [hyperlink, http://www.fincen.gov/forms/files/country_and_state_codes.pdf]. [End of section] GAO's Mission: The Government Accountability Office, the audit, evaluation, and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. 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