OVDP FAQ 29: Think Before You Leap
It’s no secret that many US persons who have been intentionally hiding income from the IRS have used shell companies, such as foreign corporations, trusts and partnerships. I claim no clairvoyance on the possibility of avoiding detection, but I’ve been told by people within the IRS that the IRS suspects that the vast majority of people who haven’t come clean with unreported accounts and income are hoping that their use of these foreign shell companies will protect them from detection.