The United States government continues its efforts to require UBS to divulge account information on United States citizens. A case pending in United States Federal District Court in Miami Florida, filed by the United States Justice Department on behalf of the Internal Revenue Service, is the legal vehicle being used to get this information. In a recent move, both UBS and the government requested that a hearing be continued to allow the parties to work out a resolution.
The government stated that unless UBS agrees to some kind of settlement, the federal government will continue to pursue its John Doe summonses seeking disclosure of all bank accounts in UBS that are controlled by U.S. citizens.
The ramifications for U.S. citizens is obvious. Many wealthy Americans have for years had accounts in Swiss banks without complying with U.S. reporting requirements and without paying income tax on earnings in those accounts.
The government believes that tax shelters and hidden offshore accounts cost the U.S. government an estimated $100 billion a year in lost tax revenue, according to Senator Carl Levin, D-Michigan. This latest push by the government is a continuation of its efforts to bring these tax dollars into the U.S. Treasury.
At the same that the government is vigorously pursuing its efforts to force UBS to divulge accounts held by U.S. citizens, it is also allowing citizens to take part in the IRS amnesty program. The amnesty program offers not only a way for U.S. citizens to avoid criminal liability, but to significantly reduce the penalties in the form of additional taxes and interest that can be astronomical in the case of offshore accounts.
Anyone with an offshore account should seriously consider the amnesty program. For a discussion of the amnesty program and how it works, see the previous blog posted on May 14, 2009.
