As part of its plan to generate intelligence on accountants, bankers and lawyers who help clients evade U.S. taxes by hiding money in offshore accounts, the Internal Revenue Service will grant leniency to those who volunteer to pay taxes on overseas accounts in exchange for information on who aided them in hiding the money.
Those who enter the new program — which will be offered for six months — will face lower penalties and in most cases avoid criminal prosecution.
"This is a chance to come clean on their own," said IRS Commissioner Doug Shulman during a conference call. "For taxpayers who continue to hide their heads in the sand, the situation will only become more dire." The IRS has warned that it will crack down hard on evaders who don't come forward voluntarily.
As part of the plan the IRS will reduce the penalty for failure to file an FBAR - Report of Foreign Bank and Financial Account.
The nucleus of the plan developed during the investigation into Swiss banking behemoth UBS, which last month admitted that it had helped wealthy U.S. clients evade taxes.
Meanwhile, tax-haven countries such as Switzerland and Liechtenstein have expressed moderate interest in establishing similar programs, as has Italy.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access