On August 28, 2013 we posted U.S. Turns Up The Pressure On Swiss Banks! where we discussed the Swiss Banks and listed 2009 as when Switzerland’s biggest bank UBS agrees to turn over more than 4,450 client names and pay a $780 million fine after admitting to criminal wrongdoing in selling tax-evasion services to wealthy Americans.
Then UBS then decided that it would not turn their records of a client who had a UBS account in Singapore. The government claims that despite IRS requests, UBS AG has so far not turned over records related to funds held at UBS in Singapore by “noncompliant” American taxpayer Ching-Ye Hsiaw, and it asked the court to order the bank to do so.
The federal government asked a Florida federal court on February 23, 2016 to require Swiss bank UBS to cooperate with an IRS investigation into an American taxpayer allegedly holding funds at the bank overseas, saying the government has a strong interest in determining how much the man owes in taxes.
The government claimed that despite IRS requests, UBS AG has so far not turned over records related to funds held at UBS in Singapore by “noncompliant” American taxpayer Ching-Ye Hsiaw, and it asked the court to order the bank to do so.
Acting Assistant Attorney General Caroline D. Ciraolo
of the Justice Department’s Tax Division said.
Before We Come Looking for Them”!!!
The IRS keeps updating its list of foreign banks which are turning over the names of their US Account Holders, who are now subject to a 50% (rather than 27.5%) penalty in the IRS’s Offshore Voluntary Disclosure Program (OVDP). This penalty is based on the highest account balance measured over up to eight years.
Under the program, banks are required to:
- Make a complete disclosure of their cross-border activities;
- Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
- Cooperate in treaty requests for account information;
- Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
- Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
- Pay appropriate penalties.
Following the success of the Swiss Bank Program, the Justice Department is now looking beyond Switzerland to financial institutions in other countries that may be havens for secret offshore accounts or undisclosed assets. Investigators are pursuing the wealth of leads generated through the Swiss Bank Program, and following those leads to countries such as:
- Belize,
- the British Virgin Islands,
- the Cayman Islands,
- the Cook Islands,
- India,
- Israel,
- Liechtenstein,
- Luxembourg,
- the Marshall Islands,
- Panama and
- Singapore
Non Swiss Foreign banks and financial institutions that serve U.S. customers are well-advised to heed the lessons of the Swiss Bank Program and other Justice Department enforcement actions commenced to date. Not to mention a little thing like 30% FATCA withholding for noncompliant foreign banks!
For more on where will the IRS and the DoJ will turn next as they sift through a treasure trove of data gathered from Swiss banks and from more than 50,000 U.S. taxpayers who disclosed their accounts to avoid prosecution, see our posts:
- The Swiss Bank Program is Over So What Countries are in the DoJ Sites Now?
- Hiding Money Offshore Resides on the Dirty Dozen List of Tax Scams for the 2016 Filing Season
- LB&I Agents Lose Autonomy To Centralized Office That Will Be Using Data to Identify Compliance Risks For Audit!
- OVDP Program Open Indefinitely For Taxpayers Hiding Money or Income Offshore!
Read more at: Tax Times blog
