IRS Commissioner Doug Shulman warned that there will be no new deal regarding undisclosed offshore income once an amnesty deadline expires on October 15th. On October 8, 2009, Shulman said in an interview the amnesty was just one part of broad crackdown on offshore tax evasion that would include more audits of high-wealth individuals. Shulman said the deterrent impact is just as vital to the effort as the revenue it might generate. “It’s about sending a signal to people that we are going to be much more focused… we’re going to have some breakthroughs that you haven’t seen in the past,” he said.
The voluntary disclosure initiative that was launched in late March expires on October 15, 2009. Under the amnesty offer, taxpayers who come forward to declare income from offshore or secret bank accounts get the certainty of reduced fines and general immunity from criminal prosecution. Under the terms of the program. the taxpayers who come forward must pay back taxes and interest, plus a penalty of 20% of their highest account balance over several years.
Individuals who hid illegally sourced income do not qualify for the amnesty. Those who set up elaborate separate companies to hide their income also do not generally qualify. Outside of the program, individuals who hide their money offshore face a potential fine of 50% of the highest account balance for each year. Shulman warned that those seeking a better deal should act before the deadline.
Based on the Commissioner’s comments and prior IRS announcements, we believe that the government will continue its efforts to crack down on those taxpayers who hide their income or assets offshore. We remind everyone that the Offshore Voluntary Disclosure Program expires October 15th, and that the window of opportunity to avoid criminal prosecution and huge civil penalties may close. Former IRS Attorneys of Holtz, Slavett & Drabkin are still available to talk about your foreign bank accounts and eligibility to participate in this voluntary disclosure program. You can call us at (310) 550-6200.
Copyright (c) 2009 Igor S. Drabkin. All Rights Reserved.