The Internal Revenue
Service is offering a get-out-of-jail-free card: Declare any offshore
credit cards that you have used to hide income and you'll receive only
minor penalties or no punishment at all.
The IRS, in an announcement planned for Tuesday, will give
foreign-account holders until April 15 to cooperate, according to
congressional sources briefed on the new initiative.
After that date, the IRS plans to pursue account holders and
promoters aggressively, with tough statutes that carry prison sentences
of up to 20 years.
The government estimates that 1 million U.S. citizens hold
undisclosed credit cards from offshore banks. While the cards are not
illegal, the law requires taxpayers to report ownership of foreign
Bank secrecy laws in 30 tax-haven countries have enabled people to
hide large incomes, and evade U.S. income taxes, while living lavishly
with their plastic.
The IRS began obtaining records in 2000 from Visa, MasterCard and
American Express to target people for audits and prosecution for tax
evasion. The IRS so far has about 1,000 active cases, including names of
prominent and famous Americans, congressional sources said Monday.
Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance
Committee, "is pleased with the IRS' activity in this area and looks
forward to tomorrow's announcement," said his spokeswoman, Jill Gerber.
She would not discuss details of the proposal.
The investigation is among the largest ever to target the use of
offshore bank accounts to hide income that should be subject to U.S.
Some taxpayers even have sought bankruptcy protection from tax debts
while continuing to draw on foreign accounts through credit cards issued
by foreign banks.
Our firm can help you resolve your problems with the IRS in the event
you have an offshore credit card and have not disclosed that account or
have been hiding money abroad. Don Nelson is an attorney and
therefore all communications with him as a client are subject to
attorney client privilege. Email, phone or fax for a consultation.