U.S. extends tax amnesty deadline to October 15
WASHINGTON (Reuters) – U.S. authorities will extend an amnesty program for taxpayers who have income hidden in offshore accounts by three weeks to October 15, citing pleas from tax professionals who say they could not handle the numbers of individuals rushing to take part.
The Internal Revenue Service amnesty program began in March, soon after Swiss bank UBS AG turned over the names of some account holders as part of a $780 million criminal settlement with the U.S. government. It is part of a broader crackdown on tax evaders as countries hunt for revenue in the global recession.
IRS officials and lawyers have been saying for months that the response to the so-called voluntary disclosure program has been unprecedented. More than 3,000 taxpayers have come forward, compared with fewer than 100 for all of last year.
“By extending the deadline for a short period of time, the IRS is providing relief for those who had intended to come forward prior to the deadline, but face logistical and administrative challenges in meeting it,” the agency said.
The IRS said there would be no further extensions. The latest deadline was September 23.
In exchange for coming clean by deadline, individuals would pay back taxes and a reduced fine, while generally avoiding criminal prosecution.
After months of tortuous negotiations that involved the Swiss government and challenged the country’s tradition of banking secrecy, UBS agreed in August to disclose the names of 4,450 American holders of secret accounts at the bank, ending a civil lawsuit.
The first batch of UBS account holders began to get letters from the bank last week, warning them that their names could be turned over to U.S. tax authorities.
“There is a hazard that when you do this, you are bending to the interests of people who are trying to find out if their names will be disclosed,” said Washington-based lawyer George Clarke of Miller Chevalier, who said his clients were pleased.