Agency Watchdog Accuses IRS of “Bait and Switch” with Voluntary Disclosure Programs

Lynnley Browning, Reuters, reports in, Watchdog accuses IRS of lying to tax dodgers:

The Internal Revenue Service has persuaded U.S. taxpayers to disclose hidden offshore bank accounts but then sometimes failed to cap the penalties, as promised, an agency watchdog said on Wednesday, accusing the IRS of “bait and switch.”

The Taxpayer Advocate Service, an oversight arm of the IRS, wrote in its annual report to Congress that a series of IRS voluntary disclosure programs allowing wealthy Americans to come forward and disclose their hidden accounts in exchange for reduced penalties had caused some taxpayers to pay more than they had been led to believe was required. Such taxpayers are typically those who have inherited accounts or work overseas.

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