Thursday, August 20, 2009

The Government going after offshore accounts.

A wise person more than ten years ago in Australia told me "son just pay your tax's if you are making money, by the time you set up your offshore stuff the government is going to come after you". Sure enough they did in the next few years, and took down as many high profile people that they could find. So here we go again in the States following the trend that occurred before in Aussie.Why? Growth has stopped and costs need to come down and the government needs to come up with the shortfall of revenue. See my Blog of May where this thread is already highlighted

Aivars Lode

GETTING PERSONAL: Ripples Widen In UBS Tax Case

 By Arden Dale

NEW YORK (Dow Jones)--A web of details on undeclared accounts at banks stretching far beyond UBS AG (UBS) has emerged as U.S. account holders scared by the case come forward to the Internal Revenue Service.

The banks are far flung, located in spots that range from the cantons of Switzerland to some Asian countries.

So far, the IRS has not said directly if it's investigating accounts at any bank besides UBS. Nonetheless, no one with an undeclared account appears to be safe these days.

On Thursday, the Department of Justice announced the indictment of Hansruedi Schumacher, who worked as a Swiss banking executive at Neue Zuercher Bank, a Swiss private bank in Zurich. Schumacher allegedly helped wealthy Americans conceal assets and income in Switzerland from U.S. authorities.

The indictment, said IRS Commissioner Doug Shulman, is "another step in our ongoing effort to pursue hidden offshore assets - no matter where they are located."

Indeed, the IRS said a day before in outlining its UBS deal that the Swiss government has agreed to review and process requests for account holders at other banks "to the extent that such a request is based on a pattern of facts and circumstances equivalent to those of the UBS case."

Tax authorities in the U.S. are gathering stories about undeclared accounts at many banks under an IRS program that shelters some tax evaders from the harshest penalties in return for turning themselves in.

Scott D. Michel, an attorney at Caplin & Drysdale in Washington, D.C., says his firm is handling disclosures "not just from account holders at UBS or other major Swiss banks, but from a number of well-known, and lesser known, private banks and kantonal banks."

The Caribbean islands and Asia are other sites for such accounts, he adds.

The IRS is "well aware of the many banks other than UBS that held accounts for U.S. taxpayers," says Bryan Skarlatos, a partner at New York law firm Kostelanetz & Fink.

Robert E. McKenzie, a partner in the Chicago law firm of Arnstein & Lehr LLP and the author of several books on the IRS and the U.S. Tax Court, says he has helped clients report accounts at several smaller banks in the German, French and Italian cantons of Switzerland.

By now, the IRS is likely to have a "pretty thorough list of Swiss banks with American depositors," as a result of all the voluntary disclosures, adds McKenzie.

McKenzie says that Credit Suisse recently told some of his U.S. clients to close Swiss accounts within the next several weeks.

Credit Suisse spokesman David Walker said the bank "strongly believes we have the right compliance standards in place and adhere to all applicable laws." He declined to comment on whether the bank had sent letters instructing accounts to be closed.

IRS Commissioner Doug Shulman declined to say Wednesday if the agency is investigating other banks. However, he acknowledged that the agency is getting many leads from voluntary disclosures. The UBS deal should send a message that it will pursue tax evaders with foreign accounts at other banks, he added.

In the UBS deal, the IRS will submit a treaty request to the Swiss government describing the UBS accounts for which it is requesting information. The Swiss government will then direct UBS to start turning over information on thousands of accounts to the IRS.