IRS Offers Partial Amnesty To Offshore Credit Card Users

by Leroy Baker, Tax-News.com, New York

16 January 2003

The US Internal Revenue Service announced on Tuesday that US citizens who have used offshore credit cards and bank accounts to conceal assets for the purposes of tax evasion can avoid criminal charges if they come forward before April 15.

In addition to increasing revenue collection, it is hoped that this partial amnesty will assist the IRS in its ongoing tax evasion crackdown by drawing attention to the promoters of aggressive tax avoidance schemes, as acting IRS Commissioner, Bob Wenzel explained to the Associated Press earlier this week:

'It's time for those involved in abusive avoidance schemes to make things right,' he announced, adding that: 'Those who misused offshore credit and other payment cards will be able to pay their fair share. Just as importantly, it will help the IRS get the people promoting these deals.'

New York tax lawyer, Jacob I. Friedman, also speaking to the AP this week, suggested that prosecuting the marketers of aggressive tax avoidance schemes is likely to prove difficult, as it is perfectly legal for an US citizen to hold an offshore credit card or bank account, so long as the arrangement is reported and tax on the income and interest is paid.

However, he observed that: 'if the customers go away, it doesn't pay for [the marketers] to continue.'

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