The IRS is extending the Wednesday deadline for international tax dodgers to apply for an amnesty program in order to give a rush of applicants more time to prepare their paperwork.
More than 3,000 Americans hiding assets overseas have applied for the program, which promises no jail time and reduced penalties for tax cheats who come forward, said a government official who spoke on condition of anonymity.
The Internal Revenue Service plans to announce Monday that the program will be extended until Oct. 15, said the official, who was not authorized to speak on the record ahead of the public announcement.
The IRS long has had a policy that certain tax evaders who come forward before they are contacted by the agency usually can avoid jail time as long as they agree to pay back taxes, interest and hefty penalties. Drug dealers and money launderers need not apply. But if the money was earned legally, tax evaders can usually avoid criminal prosecution.
Fewer than 100 people apply for the program in a typical year, in part because the penalties can far exceed the value of the hidden account, depending on how long the account holder has evaded U.S. taxes.
But in March, the IRS began a six-month amnesty program that sweetened the offer with reduced penalties for people with undeclared assets.