The Internal Revenue Service will extend its amnesty program until October 15 in an effort to grant more time to tax evaders to voluntarily disclose their offshore assets.

The threat of prosecution after original September 23 deadline was expected to prompt a mad rush of Americans with undeclared offshore accounts at UBS AG and other Swiss banks. 

Speaking on the extention of the deadline, law firm Baker & Hostelter LLP's Stuart Bassin said, "This gives everybody a couple of weeks to digest what's happened in the last three weeks and get their paperwork together."

Those who will voluntarily disclose their undeclared assets may avoid stiffer penalties and may be granted amnesty.

The US has been seeking details of as many as 52,000 American accounts with the UBS AG. Last month the UBS AG agreed to disclose the identities of some 4,450 American clients.  

It may be noted here that the UBS AG has already revealed the identities of 250 Americans who had possesses undeclared offshore accounts with the UBS AG.

The concerned effort by US has challenged Switzerland's longstanding banking secrecy tradition.