Treasury temporarily encouring voluntary disclosure for offshore accounts
Currently, the IRS is encouraging offshore bank account holders to come clean and avoid criminal prosecution and the more severe civil penalties.
Excet from wsj.com, dated 4-8-09:
While lawyers say some clients are planning to come in voluntarily to the IRS, others are waiting for a clearer indication of who is eligible and how the IRS defines “voluntary.” Some lawyers say that even if clients are deemed eligible for the program, those clients will be reluctant to come in because the penalties under the IRS offer can be more severe than they might appear at first glance. And some people are trying to decide whether they can continue to hide in the weeds and escape IRS attention.
The IRS “cannot guarantee that those who come forward under the voluntary disclosure practice will not be prosecuted criminally,” IRS spokesman Bruce Friedland said. “But the IRS can state that it is highly unlikely that someone who made a true voluntary disclosure would be prosecuted.” He added that IRS officials “are unable to recall an instance where someone who made a true voluntary disclosure was prosecuted.”
The article goes on to say that now is the best time for taxpayers to come clean with the IRS. If they don’t, it will be much worst later.