In March, the IRS announced that taxpayers with previously undeclared or unreported income from “hidden” offshore accounts would have under September 23 to voluntarily disclose their offshore holdings. However, in Notice 2009-84, dated September 21, the IRS extended the deadline for voluntarily filing the disclosures to October 15. They also noted that there will no further extensions granted.

The IRS extended the deadline based on repeated requests from professional tax preparers, tax attorneys and others because of significant demand from their clients. The extension is intended to provide additional time to taxpayers wanting to comply, but who had difficulty in gathering the necessary information and submitting the paperwork to the IRS within the original deadline. The extension will allow the various tax practitioners to work through their backlog of client requests and submit the appropriate paperwork to the IRS.

Taxpayers who do not voluntarily disclose their offshore accounts and related income will be subject to more severe civil penalties and, in some cases, criminal prosecution.

Taxpayers wishing to comply with the new IRS rules can find additional information on the process at the IRS website, their local/nearest IRS office and the relevant IRS publications. CPAs, professional tax preparers and other tax practitioners can also provide more information on the voluntary disclosure program.

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