Income Tax 2009 Guide

For those hiding their offshore bank accounts from IRS to save taxes might have a relief but not for long. IRS has extended Deadline for Disclosing Hidden Offshore Accounts.

IRS has issued a one-time extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. You will now have to report all your hidden offshore accounts before Oct. 15, 2009.

Under special provisions issued in March, taxpayers with these hidden accounts originally had until Sept. 23, 2009 to come forward. Those taxpayers who do not voluntarily disclose their hidden accounts by the new deadline face much harsher civil penalties, where applicable, and possible criminal prosecution.

IRS officials decided to extend this deadline after receiving repeated requests from tax practitioners and attorneys around the country following an influx of taxpayer requests. By extending the deadline for a short period of time, the IRS is providing relief for those taxpayers who had intended to come forward prior to the deadline, but faced logistical and administrative challenges in meeting it. The extension will allow tax preparers and attorneys the necessary time to interview and advise their backlog of taxpayers with these hidden accounts, and prepare the necessary paperwork to qualify for the special penalty provisions.

The IRS also announced that there will be no further extensions. As everyone knows, swiss bank ubs closing hidden offshore holdings of american clients and might be obliged to report any offshore accounts to IRS.