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IRS to Tax Evaders: Let’s Make A Deal.

February 9, 2011

On Tuesday the IRS announced the launch of a new voluntary disclose program geared towards tax outlaws. This new offer, similar to one made in 2009, gives international tax cheaters the ability to turn themselves in avoiding jail time and paying reduced fines.  Americans who hide assets overseas have until August 31st to settle up or be prepared to be locked up when finally caught. When the IRS made a similar offer back in 2009, over 15,000 tax evaders came forward collecting over $400 million in revenue. IRS Commissioner Doug Shulman says the new program “isn’t as generous because we don’t want to reward tax cheats who waited two years to come forward”. Not only would tax evaders pay back taxes, but under the new program they would also pay interest and delinquency penalties for the past eight years. They will also have to pay a penalty fine up to 25% of the highest annual amount in the overseas account from 2003 through 2010. Keep in mind this only applies to those who earned their income legally, drug dealers and money launderers need not apply.

Using the success of the 2009 offer as a guide, the IRS hopes to be able to make extensive enforcement efforts in not only tracking down the tax evaders but the bankers and financial institutions helping them hide their assets. The IRS is also expecting to increase their reporting requirements for foreign financial institutions beginning in 2013. This ongoing crackdown is stemming directly from the Obama administration. The drawback of these types of programs is that the penalties,in many cases, can far exceed the value of the hidden account. With harsher jail time and repercussions, the IRS hopes people will choose the alternative that makes the best financial and logical sense, turning yourself in.

At GAI (www.gunwel.com) we know the IRS can seem like a big bad wolf at times. Worried about any other programs or laws the IRS will create and how it can affect you? The knowledgeable staff can keep you updated and informed on all things IRS and taxes all the time. We handle the IRS so you don’t have to. So give us  a call at 212-979-6830 or stop by. We are open Monday-Friday 8am-8pm and Saturdays 8am-5pm. See you soon!!

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