The Internal Revenue Service is offering more than 4,000 taxpayers who have participated in 21 tax shelters the agency regards as abusive a reduction in potential penalties if they come in, confess, and pay all their taxes and interest, IRS Commissioner Mark W. Everson said yesterday.

The "initiative," as the IRS calls it -- "this is not an amnesty," Everson said -- follows similar programs for shelters such as "Son of BOSS" and executive stock options, in which the agency collected millions of dollars from hundreds of taxpayers.

Everson said he could not predict how much the new program would bring in, but he said the amount of revenue that has gone uncollected as a result of the shelters "clearly . . . runs into the billions of dollars."

The 21 shelters range from highly sophisticated deals involving foreign currency trading by wealthy individuals to more basic attempts to underpay taxes by small businesses that double-count health insurance costs or parking benefits for workers. Many are still in the audit stage, Everson said, adding that while the IRS has identified 4,000 offending taxpayers so far, many more may turn up.

He called the program "a win-win -- the taxpayers [involved] can put it behind them, and we can clear out our inventory."

The agency divided the 21 transactions into three categories, two covering shelters the IRS has already identified as abusive and listed as such, and a third covering five kinds of transactions that the IRS regards as suspicious. The last group includes donations to charity of patents and other intellectual property and donations of facade easements on real estate.

Everson said some of these may be perfectly legitimate. However, he said, the IRS has found cases in which taxpayers went into such transactions not to benefit charities but "to get an inflated tax deduction," and those taxpayers "probably know who they are."

To participate in the program, a taxpayer will have to concede all the tax benefits derived from the shelter and pay interest on the unpaid taxes. The taxpayer will, though, be allowed to deduct transaction costs of the shelter, including fees paid to promoters.

The taxpayer will also have to pay a portion of penalties that would normally be assessed if a tax benefit is disallowed. These penalties in most cases would be 20 percent of the tax, but in some cases would be 40 percent. In 15 of the 21 shelters the taxpayer would have to pay a quarter of the normal penalty. In the remaining six, which the IRS regards as more abusive, the share would be half.

However, taxpayers can escape penalties if they either disclosed the transaction earlier, as the IRS requires of certain listed transactions, or if they relied on an opinion from an independent expert that the deal was legitimate. "And I emphasize 'independent,' " meaning the expert must not be connected to the shelter promoter, Everson said.

Taxpayers have until Jan. 23 to come forward.

Last year's Son of BOSS initiative, involving a shelter marketed to wealthy individuals in the late 1990s, netted the IRS more than $3.7 billion from some 1,200 taxpayers. A similar program, targeting executives who sought to defer for 30 years tax on stock options received from their companies, brought in about $500 million.