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IRS' special deal for reporting of undisclosed offshore accounts now ends Oct. 15, 2009

On Sept. 21, 2009, the Internal Revenue Service announced another extension of the deadline for special voluntary disclosures by taxpayers with unreported income from offshore accounts. These taxpayers now have until Oct. 15, 2009 to make the voluntary disclosures.

The IRS also announced that there will be no further extensions.

Under special provisions issued in March 2009, taxpayers with unreported accounts originally had until Sept. 23, 2009 to report these accounts to the IRS.

Failure to disclose these accounts could result in civil and even criminal penalties.

According to the Sept. 21, 2009 IRS announcement, the IRS decided to extend the filing deadline to provide 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 give tax preparers and attorneys the necessary time to contact their clients and prepare the necessary paperwork to qualify for the special penalty provisions.

The IRS has indicated that this extension also applies to taxpayers who have paid all of their U.S. income taxes in prior years, but have not filed the Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1, reporting those accounts to Treasury during those years. These taxpayers should file the FBARs reporting such accounts for 2008 and prior years by Oct. 15, 2009.

Taxpayers who are eligible for the June 30, 2010, filing extension set forth in Notice 2009-62 presumably continue to be eligible for such extended deadline.

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