The Internal Revenue Service will announce on Monday that it is extending its amnesty program intended to root out those suspected of using offshore accounts to evade taxes. The move comes as a flood of wealthy Americans with secret accounts in Switzerland and elsewhere are coming forward to disclose their hidden assets.
The I.R.S. will give such account holders an additional 22 days, until Oct. 15, to reveal their accounts if they hope to escape stiffer penalties, a government official said late Sunday. After that, the government plans to prosecute those suspected of tax evasion whose identities it learns but who do not come forward.
The so-called voluntary disclosure program, which began in March as a way of luring American clients of the Swiss bank UBS out of the woodwork, has attracted 3,000 taxpayers so far, compared with just 80 last year, the official said. Some of the taxpayers are clients of other banks.
UBS is preparing to hand over 4,450 client names under a deal reached last month with the I.R.S. and the Justice Department, which is investigating the bank’s offshore services. In February, UBS admitted its criminal wrongdoing with the services and paid a $780 million fine.
The original deadline for the amnesty program was Wednesday.
Investors who come forward before Oct. 15 will be subject to a reduced penalty, of 5 to 20 percent, depending in part on whether their wealth was inherited.
They will also be hit with the penalty just once, on the highest balance in the accounts over the last six years, instead of for each of the six years, a level that can leave account holders owing more in taxes than they have.
(Source: NY Times)