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WASHINGTON (AP) -- Procrastinating tax cheats will get a few extra weeks to apply for an amnesty program that has been flooded with applications from people who hid assets overseas.
The Internal Revenue Service said Monday it will extend the deadline, originally set for Wednesday, until Oct. 15.
More than 3,000 Americans have applied for the program, which promises no jail time and reduced penalties for tax dodgers who come forward, said a government official who spoke on condition of anonymity because the agency has not publicly released the size of the program.
The IRS is extending the deadline to give a rush of applicants more time to prepare their paperwork. The agency said there will be no additional extensions.
Tax advisers said the program, combined with a high-profile case against Swiss banking giant UBS AG, has generated a lot of calls from nervous tax dodgers.
"They're sitting in disbelief that this is going on," said Richard Boggs, chief executive of Nationwide Tax Relief, a Los-Angeles-based tax firm that specializes in clients with tax debts exceeding $100,000. "I ask people to ask of themselves, 'What is their peace of mind worth? What is a fresh start worth? What is a clear conscience worth?'"
The IRS long has had a policy that certain tax evaders who come forward before they are contacted by the agency usually can avoid jail time as long as they agree to pay back taxes, interest and hefty penalties. Drug dealers and money launderers need not apply. But if the money was earned legally, tax evaders can usually avoid criminal prosecution.
Fewer than 100 people apply for the program in a typical year, in part because the penalties can far exceed the value of the hidden account, depending on how long the account holder has evaded U.S. taxes.
But in March, the IRS began a six-month amnesty program that sweetened the offer with reduced penalties for people with undeclared assets. The program was extended after tax advisers from across the country contacted the IRS, requesting more time to prepare applications, IRS spokesman Terry Lemons said.
The amnesty program is part of a larger effort by federal authorities to crack down on international tax evaders. In August, the U.S. and Switzerland resolved a court case in which Swiss banking giant UBS AG agreed to turn over details on 4,450 accounts suspected of holding undeclared assets from American customers.
The process of turning over the information is expected to take several months. But once the IRS obtains information about an international tax dodger, they will be ineligible for the amnesty program.
"This era of true banking secrecy is over," said Peter Zeidenberg, a litigation partner at the law firm DLA Piper in Washington. "I think most practitioners would tell you it's foolhardy to think the IRS is not going to get their hands on this information."
It's still difficult for U.S. authorities to get information about some foreign accounts, many of which aren't labeled with names and Social Security numbers, said Matt Campione, a tax lawyer at Vienna, Va., law firm of Smolen Plevy.
But, Campione said, tax dodgers can't rest easy just because they escape this year's crackdown.
"If it's not this year or next year, it's three or four years from now," Campione said. "I believe the government is going to get more and more creative in going after these accounts."
Found here
Relevant Link to IRS
The Internal Revenue Service said Monday it will extend the deadline, originally set for Wednesday, until Oct. 15.
More than 3,000 Americans have applied for the program, which promises no jail time and reduced penalties for tax dodgers who come forward, said a government official who spoke on condition of anonymity because the agency has not publicly released the size of the program.
The IRS is extending the deadline to give a rush of applicants more time to prepare their paperwork. The agency said there will be no additional extensions.
Tax advisers said the program, combined with a high-profile case against Swiss banking giant UBS AG, has generated a lot of calls from nervous tax dodgers.
"They're sitting in disbelief that this is going on," said Richard Boggs, chief executive of Nationwide Tax Relief, a Los-Angeles-based tax firm that specializes in clients with tax debts exceeding $100,000. "I ask people to ask of themselves, 'What is their peace of mind worth? What is a fresh start worth? What is a clear conscience worth?'"
The IRS long has had a policy that certain tax evaders who come forward before they are contacted by the agency usually can avoid jail time as long as they agree to pay back taxes, interest and hefty penalties. Drug dealers and money launderers need not apply. But if the money was earned legally, tax evaders can usually avoid criminal prosecution.
Fewer than 100 people apply for the program in a typical year, in part because the penalties can far exceed the value of the hidden account, depending on how long the account holder has evaded U.S. taxes.
But in March, the IRS began a six-month amnesty program that sweetened the offer with reduced penalties for people with undeclared assets. The program was extended after tax advisers from across the country contacted the IRS, requesting more time to prepare applications, IRS spokesman Terry Lemons said.
The amnesty program is part of a larger effort by federal authorities to crack down on international tax evaders. In August, the U.S. and Switzerland resolved a court case in which Swiss banking giant UBS AG agreed to turn over details on 4,450 accounts suspected of holding undeclared assets from American customers.
The process of turning over the information is expected to take several months. But once the IRS obtains information about an international tax dodger, they will be ineligible for the amnesty program.
"This era of true banking secrecy is over," said Peter Zeidenberg, a litigation partner at the law firm DLA Piper in Washington. "I think most practitioners would tell you it's foolhardy to think the IRS is not going to get their hands on this information."
It's still difficult for U.S. authorities to get information about some foreign accounts, many of which aren't labeled with names and Social Security numbers, said Matt Campione, a tax lawyer at Vienna, Va., law firm of Smolen Plevy.
But, Campione said, tax dodgers can't rest easy just because they escape this year's crackdown.
"If it's not this year or next year, it's three or four years from now," Campione said. "I believe the government is going to get more and more creative in going after these accounts."
Found here
Relevant Link to IRS
