Thursday, February 10, 2011

IRS announces new amnesty program for tax cheats

As previously indicated, the IRS has announced a new amnesty program for tax cheats who have concealed money in foreign bank accounts. The program comes on the heels of increased IRS scrutiny of foreign banking, notably UBS and Deutsch Bank AG.

The new program bears many similarities to a prior tax amnesty program which ran from March through October of 2009, and resulted in 15,000 Americans’ confession of illegal tax avoidance. The current program is less lenient, so as not to reward those who have waited, but also offers a few specific caveats for smaller accounts held by persons who can prove minimal knowledge or involvement in the offshore account. Persons to whom those specifications would have applied in the first amnesty program are invited to return now and have their fines reassessed.

According to the Wall Street Journal, the primary incentive for Americans to come forward is to avoid jail time or harsher fines. IRS Commissioner Doug Shulman stated that the program “gives people a chance to come in before we find them.” The new program is “the last, best chance for people to get back into the system,” he said. The deadline has been set for August 31, 2011.