7,500 American Offshore Accounts Admitted To

October 15, 2009 Offshore BankingOffshore TaxationTax HavensTaxation in USA  No comments

According to the US Internal Revenue Service (IRS), 7,500 offshore account holders have revealed their details in exchange for leniency on their subsequent judgment.

In an effort to curb tax evasion and retrieve tax liabilities avoided through offshore accounts, the IRS is offering a tax amnesty program which sees lower penalties and prosecution avoidance for those harboring money overseas. The program which requires submissions to be made by 5pm on October 15th, has now received over 7,500 applications. According to IRS statements, admittances of offshore accounts have ranged from US$10,000 to over US$100 million in value. While spurned by the IRS’s court action against Swiss bank UBS, amnesty applications have been now been received from over 70 jurisdictions, and every continent except Antarctica.

Originally scheduled to expire September 23rd, the tax amnesty program was extended to October 15th. According to Doug Shulman, IRS Commissioner, no further extensions will be granted, and those discovered to be hiding wealth in the future will be prosecuted to the IRS’s typical extent. Further, Doug Shulman declared that the IRS will be “scouring the 7,500 disclosures to identify financial institutions, advisers and others” in an effort to root out tax evaders who did not take advantage of the tax amnesty program.

According to an outline provided with the announcement of the tax amnesty program, the IRS will levy a fee of 20% of the account’s peak value over the last six years and require that all taxes and appropriate interest be repaid. Although, following preset conditions on the account’s activity levels and original purpose, the fee could be reduced to 5%. Conversely, typical procedure could see 150% of an account’s peak value confiscated. The amnesty program also provides protection from further prosecution, on the condition that the original funds were earned legally.

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