IRS Commissioner Douglas Shulman said today that the collection agency is “seriously considering” a new partial amnesty program for taxpayers who report secret offshore bank accounts. The IRS may repeat a voluntary disclosure program such as one that drew nearly 15,000 taxpayers between March 2009 and October 2009. Volunteers then avoided prosecution by declaring accounts and paying fixed penalties. Since then, another 3,000 taxpayers declared accounts and face undetermined penalties.
The program began as part of an IRS shakedown of offshore tax evaders fostered by UBS AG, Switzerland’s largest bank. Over the past year, the IRS has sought to expand its dragnet around the world.
But Shulman cautioned that a new amnesty program would not be as enticing financially. “Given its success, we are seriously considering another special offshore voluntary disclosure program,” Shulman said today at a tax conference in Washington. “However, there will be some fundamental differences. Taxpayers will not get the same deal as those who came in under the original program.”
Until October 2009, participants avoided prosecution by paying taxes for six years on undeclared income and a 20 percent penalty on those taxes. They also had to pay 20 percent of the highest value of undisclosed accounts over those six years. Without the amnesty, taxpayers face penalties of as much as 75 percent on evaded taxes and 50 percent on undeclared accounts.
Tax lawyers applauded the announcement.