The US Internal Revenue Service recently announced an extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. These taxpayers now have until 15 October 2009.
Under special provisions issued in March, taxpayers with these hidden accounts originally had until 23 September 2009 to come forward. Those taxpayers who do not voluntarily disclose their hidden accounts by the new deadline face much harsher civil penalties, where applicable, and possible criminal prosecution.
IRS officials decided to extend this deadline after receiving repeated requests from tax practitioners and attorneys around the country following an influx of taxpayer requests. By extending the deadline for a short period of time, the IRS is providing relief for those taxpayers who had intended to come forward prior to the deadline, but faced logistical and administrative challenges in meeting it. The extension will allow tax preparers and attorneys the necessary time to interview and advise their backlog of taxpayers with these hidden accounts, and prepare the necessary paperwork to qualify for the special penalty provisions. The IRS also announced that there will be no further extensions.
The IRS offensive against hidden offshore accounts comes at the same time as similar activity in Europe such as the UK HMRC's NDO and LDF and Italy's tax amnesty.
