The almost-overnight sensation of the IRS offshore account voluntary disclosure program is about to close.
After the deadline was extended three weeks ago, from September 23rd to October 15th (see http://lifelawandtaxes.com/irs-extends-voluntary-disclosure-deadline-for-secret-offshore-account/), the final deadline is now only days away. See also the New York Times article, “Tax Evaders Face Choice: Pay or Pray” by Lynn Browning.
While touting itself as a program by which taxpayers with unreported income in foreign bank accounts can “come in from the cold,” avoid criminal prosecution, and pay a penalty which is stiff, but not as severe as the penalties a taxpayer would be subject to outside the program, what seems to get lost in the discussion of this program is the fact that taxpayers who seek to participate are required to confess to a tax crime, waive their 5th Amendment right against self incrimination before knowing whether the Government will commit not to pursue criminal charges against them.
That is a danger of this program. Still, news accounts plus telephone conversations with IRS employees working in its criminal investigation division report that thousands of taxpayers are lining up to participate, submitting written disclosures in order to get that promise not to prosecute and the stiff but less horrible than otherwise penalty structure.