IRS extends amnesty for tax cheats: Good or bad idea?

How should tax cheaters be treated? And does the mounting federal deficit play into your thinking?

Tax dodgers who hid assets overseas will get a few extra weeks to apply for an amnesty program that has been flooded with applications ahead of Wednesday’s deadline, the Associated Press reports.

The Internal Revenue Service plans to announce today that the deadline will be extended until Oct. 15, a government official who spoke on condition of anonymity told AP.

More than 3,000 Americans have applied for the program, which promises no jail time and reduced penalties for tax cheats who come forward, said the official who was not authorized to speak on the record ahead of the public announcement, AP writes.

The program is not for drug dealers and money launderers. But if the money was earned legally, tax evaders can usually avoid criminal prosecution.

What do you think? Good or bad idea?

6 comments Add your comment

TaxRule

September 21st, 2009
9:56 am

Bad idea–when you change the law for a special group, and not for others, the confidence in the fairness of the tax system, which is already low, goes down. Enforce all laws, equally, and don’t grant special favors or exemptions for groups with a lot of money or connected lawyers / lobbyists.

Robert Tobey, CPA

September 21st, 2009
11:11 am

This short article misrepresents the IRS’s volutary discloure program for off-shore bank and asset accounts giving readers a false impression. If owners of foreign bank and asset accounts voluntarily disclose these accounts, the IRS will not criminally prosecute them. However, these owners, generally, will be subject to a 20% penalty on the highest account value during the period 2003 – 2008 and will have to report the earnings on these accounts for the same period. These earnings will be taxed and interest and penalties will be due top the taxes unpaid for years 2003 – 2008. The program was devised to bring taxpayers (individauls, corporations, trusts, pass-through entities) into compliance. The carrot was no criminal prosecution, the stick is the civil penalty provisions. Clients I am presenting under this program are intentional tax cheaters (I suspect this is the same for other practitioners.), but are people who have inherited accounts about which, prior to this year, were not aware.

Dood

September 21st, 2009
1:09 pm

How about tax cheat and Treasury Secretary Tim Geithner or tax cheat Charles Rangel (he has amended his tax data numerous times after “discovering” that his net worth has doubled)? Do laws only apply to private citizens or what?

Homer Simpson

September 21st, 2009
1:48 pm

How about amnesty for bank robbers if they return the money. I mean if you going to let criminals off, might as well make it for all crimes.

zeke

September 21st, 2009
10:26 pm

Ridiculous! The whole idea that people legally depositing money in foreign banks to avoid the ridiculous US tax on money made outside the US is absurd! If I invest money in Germany, and, am lucky enough to make a profit on that investment, the US government should be enthralled if I bring that money home, and, possibly invest it in the US economy! But no, the socialists here think they have a legal right to tax that money made outside the US! RIDICULOUS! That is why INBEV bought Busch and not the reverse! That is why foreign companies and individuals are buying up US companies and properties instead of the reverse! ENOUGH OF THIS SOCIALIST CRAP! WE NEED TO RID OUR GOVERNMENT OF THESE SOCIALIST DEMOGOGS!!!!!!!!!

Globals

October 2nd, 2009
10:41 pm

all good things