IRS gives tax evaders a partial pass but not drug dealers

I’m sure this will have Richard Murphy up in arms. According to the New York Times, the IRS is taking its foot off the gas in the pursuit of penalties for those who voluntarily give up details of their offshore tax evasion. There is a rider:

In another shift, the I.R.S. will generally not prosecute taxpayers who come forward voluntarily, provided they are not drug dealers, arms merchants or others with ill-gotten gains. And it will not assess a 35 percent penalty on money secretly transferred to foreign trusts — a common method of tax evasion.

I can just picture it…

The IRS is spinning it as a way of getting tax evaders back into the system but I’m wondering just how much the treasury anticipates hurting on falling tax receipts just at a time when the Fed is printing money like it is confetti. Turning attention to the UK, I wonder whether HMRC will adopt a similar position. It would certainly give the UK government a sop with which it could appear to act tough yet soft pedal on tax abuses.

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