State taxpayers who haven't reported income from offshore bank accounts have until Thursday to declare the income with less chances of criminal prosecution.

The state's voluntary disclosure program for undeclared offshore bank accounts ends Thursday, after which the tax department says they'll give more consideration to criminal prosecution of those found to be hiding income from foreign accounts.

"I would recommend you come clean and fix your tax situation," said Kurt Kawafuchi, state tax director.

"If you don't, you take your chances that you're going to get caught."

The state started the program in August and patterned it after the program offered by the Internal Revenue Service for people who haven't reported the offshore income on their federal taxes.

The federal program requires people amend six years of tax returns and pay back taxes and some penalties. It also ends on Thursday.

People who have secret offshore bank accounts are under pressure to come clean since Switzerland agreed to hand over data to the United States of thousands of UBS accounts. Those who voluntarily admit the unreported income have a smaller chance of being prosecuted along with other leniency, including the possibility of lower penalties.

Though typically thought of as a tax dodge used by wealthy people with Swiss accounts, there are a number of other situations where people might have money in offshore banks elsewhere who haven't reported it on their Hawaii income tax returns.

Kawafuchi estimated there are several thousand Hawaii residents who may have overseas bank accounts.

He said some of these could have inherited the money, others may have opened an account while working overseas or kept an account after immigrating to the state.

Generally, these types of people probably won't be referred by the state for criminal prosecution under the voluntary program. People also have to commit to full disclosure and make arrangements to pay what is owed.

"We're going to be a lot easier if they come forward before we catch them," Kawafuchi said.

Others could have skimmed money from a business to avoid taxes or hide assets from a spouse or ex-spouse. There also could be drug money that was sent to offshore accounts, Kawafuchi said. He said these types of circumstances may warrant criminal prosecution even if the income is voluntarily disclosed.

There also could be prosecution if no criminal activity was involved, but if the case involves high-profile people.

But in all cases the outcome probably will be worse if the state discovers the unreported income on its own.

"We do have some cases we're looking into right now," Kawafuchi said. He said the state will be talking with the IRS to share information on offshore accounts.

It also will be asking those people who come forward for information about who else was involved in the case.

"The downside is tremendous," he said.

So far the program has netted a number of calls, including one Hawaii couple that brought an attorney in from New York to clear up the matter.