Tags: Tax Cheats

US Tax Agency Cuts Penalty If Tax Cheats Admit it

Tuesday, 08 Feb 2011 02:46 PM

WASHINGTON (AP) — International tax evaders who admit wrongdoing will be able to avoid jail and pay reduced fines under a new voluntary disclosure program announced by the main U.S. tax collection agency Tuesday.

Tax cheats will have until Aug. 31 to settle up with the Internal Revenue Service or face a crackdown against Americans who hide assets overseas, IRS Commissioner Doug Shulman said.

"If we find you, you face harsher penalties and the possibility of jail time," Shulman said. "If you come in voluntarily, you pay a steep price but avoid going to jail."

The offer is similar to one the IRS made in 2009 that netted 15,000 tax evaders. Shulman said the IRS has closed 2,000 of those cases, collecting $400 million in additional revenue.

Shulman said the new offer is not as generous because he does not want to reward tax cheats who waited two years to come forward.

Under the new program, tax evaders must pay back taxes, interest and delinquency penalties for the past eight years, if accounts have been held that long. In addition, they will have to pay a penalty of up to 25 percent of the highest annual amount in the overseas account from 2003 through 2010.

Shulman said the 2009 disclosure program provided the IRS with many leads on the bankers and financial advisers who help Americans hide assets. He said the IRS is now investigating "a number of other banks" and is tracking the flow of illicit money.

"We've been getting better and better at detecting offshore accounts. Therefore, the risk of being caught is increasing," Shulman said. "We now have a number of other banks under investigation based on information we received from our first round of disclosures and from other sources. Tax secrecy continues to erode."

Shulman declined to provide details about any current investigations.

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.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved