Tax cheats: Fess up without going to jail

By Blake Ellis, staff reporter


NEW YORK (CNNMoney) -- Tax cheats hiding money offshore have until the end of August to fess up if they want Uncle Sam to take it easy on them.

The IRS announced on Tuesday that it would give taxpayers a reduction in penalties -- and no jail time -- if they fess up to any undisclosed overseas accounts by Aug. 31.

"This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all," said IRS Commissioner Doug Shulman in a prepared statement. "And it gives people a chance to come in before we find them."

Tax evaders will face a penalty of up to 25% of the highest annual account balance going back to 2003, though some taxpayers will be able to receive a penalty of as little as 5% depending on the size of the account.

The program also requires tax evaders to fork over back taxes, interest and late charges for up to eight years.

This is the IRS's second voluntary attempt at this program. In 2009 it reeled in 15,000 taxpayers with undisclosed overseas accounts at banks in more than 60 countries.

Penalties under the new initiative are higher than they were during the 2009 program so that people who waited to fess up aren't rewarded. However, Schulman said that as the IRS continues to invest more resources in cracking down on these illegal offshore accounts, this is the time to come forward.

"The situation will just get worse in the months ahead for those hiding assets and income offshore," he said. "This new disclosure initiative is the last, best chance for people to get back into the system." To top of page

 
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.96%4.12%
15 yr fixed3.13%3.14%
5/1 ARM3.11%3.25%
30 yr refi4.00%4.17%
15 yr refi3.14%3.21%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,081.81 57.64 0.32%
Nasdaq 4,786.71 21.29 0.45%
S&P 500 2,087.05 4.88 0.23%
Treasuries 2.29 0.03 1.51%
Data as of Dec 24
Company Price Change % Change
Bank of America Corp... 18.04 0.12 0.64%
Gilead Sciences Inc 92.34 2.89 3.23%
General Electric Co 25.71 -0.17 -0.66%
Cisco Systems Inc 28.57 0.32 1.13%
Apple Inc 112.22 -0.32 -0.28%
Data as of Dec 24

Sections

JetBlue is offering to fly police to New York for the funeral of slain NYPD officers and is working to have the family of one of the officers flown in from overseas. More

Many Americans are buying more gifts -- and more expensive gifts -- for Christmas. That's squeezing some in the middle class. More

Marriott's plan to block Wi-Fi hotspots in its hotels is being opposed by Google and Microsoft. More

According to data from Google Trends and GrubHub, Chinese food remains the most popular type of food order on Christmas. More

If you're looking to sell your holiday gift cards for cold hard cash... there's an app for that. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.