IRS Isn't Just Pursuing UBS Clients; Auditors to Look at Other Foreign Banks
In the wake of a precedent-setting federal court ruling earlier this week that the IRS can seek the names of Americans holding secret accounts from Swiss-based UBS AG, the agency is stepping up enforcement efforts at other foreign banks.
It is asking auditors at major accounting firms to help identify banks at which U.S. residents may have established secret accounts in an effort to avoid paying taxes, and has scheduled a Tuesday conference call to discuss the issue with the accounting firms, reports Bloomberg.
UBS apparently was one of about 5,000 foreign banks in 70 countries that are considered qualified intermediaries in an IRS program in which the banks agree to notify the agency of U.S. depositors and the earnings in their accounts and submit to examination by IRS-approved auditors. In return, they are permitted to withhold taxes for such account-holders at favorable rates.
However, it appears from court filings that UBS, at least, was not notifying the IRS of all such accounts, dividing U.S. customers into two groups: those who were willing to submit required paperwork and “undeclared” account-holders, according to Bloomberg.
A former UBS private banker and U.S. citizen, Bradley Birkenfeld, pleaded guilty last month to conspiring to help a California billionaire, Igor Olenicoff, evade income tax on assets hidden in Switzerland and Liechtenstein, as Bloomberg details in an earlier article. In plea documents, Birkenfeld, who is scheduled to be sentenced next month, says UBS helped wealthy U.S. clients conceal some $20 billion in assets.
Earlier coverage:
ABAJournal.com: “US Court Tells Swiss Bank UBS to Reveal Customer Names”
ABAJournal.com: “Tough Calls for US Tax Dodgers & Counsel; Secret Bank Accounts Exposed”
ABAJournal.com: “Billionaire Olenicoff’s Plea Docs Describe Tax Evasion Techniques”
