October 15th brings deadline to file taxes; application to IRS amnesty program
October 15th, 2009If you filed an extension to file your income taxes, time is up! Today is the deadline to e-file or mail in your federal tax return. Remember, the failure to file penalty can be quite steep, so even if you owe taxes and cannot pay them all at once, get that return submitted. You can make payment arrangements with the IRS to repay your tax debt, but they do not look kindly on taxpayers who completely fail to file a return.
The other important deadline today is for an IRS amnesty program created to get tax dodgers back into the U.S. tax system. Started in March 2009, the program was set to last for six months, but the IRS extended the deadline to October 15, 2009.
According to the Associated Press, some 7500 people with bank accounts in more than 70 different countries and on six of the seven continents have applied for amnesty under the program. Senator Carl Levin, who has worked for years on the issue of tax evasion, estimates the U.S. loses $100 billion a year in tax revenue due to money being sequestered in offshore bank accounts.
The amnesty program allows these people to come forward without fear of jail time, so long as they pay their back tax debt. The IRS has long had a policy in place where tax evaders could avoid jail time by coming forward before being contacted by the agency, but the tax evader had to pay their back taxes owed, along with heavy penalties and interest. The amnesty program offered reduced penalties to sweeten the deal.
The IRS is looking to gain information from the tax evaders to go after bankers and tax advisers who helped them hide their assets.
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