Germany sees surge in tax evaders coming clean

* German tax offices deluged by tax evaders

* Tax compliance rises amid media cover of Swiss bank data

By Erik Kirschbaum

BERLIN, Feb 17 (Reuters) - At least 1,800 German tax evaders have turned themselves into authorities in the past two weeks to avoid risking jail following the government's decision to buy stolen Swiss bank account data.

State taxes offices from Berlin to Baden-Wuerttemberg said on Wednesday they had been swamped by taxpayers coming clean to report undeclared earnings to avoid prosecution.

The wealthy southwestern state of Baden-Wuerttemberg said in the past 10 days a total of 566 people have confessed to evading taxes worth a total of 85 million euros while the city-state of Berlin said 177 people had turned themselves in.

"It's nice to see the public discussion on tax evasion has woken up so many people," said Kathrin Bierwirth, a spokeswoman for the state of Berlin's finance ministry. "It's interesting to see all these people eager to clear their conscience."

Under German law, taxpayers who report undeclared income themselves and pay back tax plus interest owed before authorities launch an investigation can avoid prosecution.

There has been intense media coverage in Germany of looming action against tax evaders, which prompted a number of people to report previously undeclared earnings to authorities.

"Tax evasion is not a petty crime," Baden-Wuerttemberg's Finance Minister Willi Staechele said.

Tax offices in other states have noted a sharp upturn in tax evaders coming clean: Bavaria (300), Lower Saxony (250), Hesse (330), Rhineland-Palatinate (150) have had the highest numbers.

Germans hold an estimated 200 billion euros ($275 billion) in undeclared funds in Switzerland.

Ignoring protests from Switzerland, Germany said last week it would pay 2.5 million euros for the stolen data said to be rich in detail about tax evaders that could, according to media reports, yield at least 400 million euros in tax revenues.

Germany's willingness to pay for the stolen bank data has shaken Switzerland's large private banking industry and stirred emotions in both countries.

The atmosphere in Germany has clearly changed in the past two years, when tax evasion was seen by many as a minor offence. Now, with the public finances strapped, the public seems to be less tolerant of tax evasion.

In 2008 Germany paid for stolen data taken from Liechtenstein's top bank LGT. Former Deutsche Post chief Klaus Zumwinkel's Liechtenstein trust was uncovered in that data and he admitted to tax evasion in a spectacular case. (Editing by Jon Boyle)