TAX NEWS - January 2010

Connecticut Tax: One Week Remains in Offshore Voluntary Disclosure Program

Program to pay back taxes, avoid criminal prosecution ends January 15

Hartford – The Connecticut Department of Revenue Services (DRS) today reminded those with unreported income in offshore accounts that the Connecticut Offshore Voluntary Disclosure Program ends January 15. "Time is running out. Those Connecticut taxpayers who still have income in these accounts have just one week left to come forward and settle their state tax liabilities without civil or criminal penalties. I urge them to take advantage of this opportunity," said DRS Commissioner Richard Nicholson.

The Offshore Voluntary Disclosure Program was initiated after the Swiss government reached an agreement with the U.S. Department of Justice and Internal Revenue Service (IRS) to release of the names of 4,450 United States residents suspected of using foreign bank accounts held by UBS AG to evade taxes. Governor M. Jodi Rell directed Attorney General Richard Blumenthal to pursue obtaining information from the U.S. Government relating to Connecticut taxpayers who may have undisclosed assets in Swiss banks. 

Recently, the IRS concluded a similar voluntary disclosure program for federal tax liabilities on unreported offshore income. "The IRS has informed state tax officials that it is committed to sharing the information it obtained through its voluntary disclosure program. Between the information the agency will receive from the IRS and the efforts of Attorney General Blumenthal, I am confident we will find those taxpayers who don't come forward during the program," Commissioner Nicholson said.

To make a voluntary disclosure, taxpayers should submit the following information:

- A cover letter stating an intention to enter the Connecticut Offshore Voluntary Disclosure Program;
- A description of the source of funds or other assets in each account;
- The date the initial deposit was made or the date on which the taxpayer took control or ownership of each account;
- Documentation indicating whether the principal (which includes initial deposits and all subsequent contributions) has been taxed or untaxed and the tax years involved;
- The amount of potential tax liability; and
- Whether the taxpayer participated in the IRS Offshore Voluntary Disclosure Program.

To participate in the program, taxpayers must mail the above information to Department of Revenue Services Business and Employment Tax Audit Unit, 25 Sigourney Street Ste. 2, Hartford Connecticut  06106. The information must be postmarked no later than January 15, 2010 to be eligible.

More information about the Offshore Voluntary Disclosure Program can be found in SN 2009(5), Connecticut Voluntary Offshore Program, which is available on the DRS website at www.ct.gov/DRS/offshore, or interested taxpayers can call the Business and Employment Tax Audit Unit during regular office hours at (860) 541-4560.

For information about other tax issues, visit the DRS website at www.ct.gov/DRS or for assistance call 1-800-382-9463 in state, or (860) 297-5962 from anywhere. Media calls should be directed to the communications office at (860) 297-5610.