US Top Senator Proposes Stiffer Penalties For Tax Evaders - Report

Tom Burroughes

12 March 2009

US lawmaker, Senate Finance Committee chairman Max Baucus, is circulating draft legislation that would double some penalties on US citizens who use offshore bank accounts to evade taxes and give the Internal Revenue Service more tools to catch them, reports Bloomberg.

The 15-page plan would stop short of more sweeping changes proposed on 2 March by Michigan Senator Carl Levin that won support from President Barack Obama’s administration.

Mr Baucus’s legislation would require foreign banks that let customers trade US securities to report more detailed information about account holdings to the IRS. It would double to six years the amount of time the IRS may pursue back taxes in civil actions.

It also would require US citizens to file with their tax returns a form disclosing the contents of foreign accounts containing more than $10,000. Taxpayers already must send the form to the Treasury Department. The finance committee plans a 17 March hearing on the draft legislation.

Senator Levin proposed a dozen laws to stop what he said was a loss of $100 billion annually in US taxes on income held in offshore accounts that isn’t reported on tax returns.