In the IRS’ ongoing battle against tax evasion, a key deadline is approaching. Individuals with previously-unreported offshore bank accounts have until next Wednesday, September 23, to disclose the accounts’ existence and pay both back taxes and penalties without facing criminal charges. The deadline comes as UBS prepared to turn over 4,450 account-holders’ names to the Department of Justice as part of the ongoing tax evasion investigation. Besides avoiding criminal penalties, individuals who voluntarily disclose their offshore accounts will not be subject to penalties for failing to file a Foreign Bank Account Report.
As Wendy Kaufman reported for NPR’s Morning Edition today, however, tax evasion cases can be hard to prove, making the decision to provide voluntary disclosure a particularly difficult one. Nonetheless, considering that the 4,450 names to be disclosed by UBS are just the starting point in the agreement between the Swiss and US governments, holders of undisclosed offshore accounts have reason to be concerned. Reflecting that concern, more than 400 voluntary disclosures were made in a single week in July of this year, more than were made in all of 2008.