US Govt Announces 'Unprecedented' Response To Offshore Amnesty

by Glen Shapiro, LawAndTax-News.com, New York

19 November 2009

The US Justice Department and the Internal Revenue Service (IRS) have announced that over 14,700 taxpayers have come forward to report previously-undisclosed foreign bank accounts under the voluntary disclosure program the IRS implemented following the UBS settlement.

This figure represents almost double the initial numbers the IRS announced in October and is far higher than the number of voluntary disclosures received in 2008.

Deputy Attorney General David W. Ogden said that the Justice Department was "pleased" with the "extraordinary" results of the government's settlement with Swiss bank UBS and the subsequent amnesty, reiterating the administration's belief that "the era of bank secrecy and hidden assets is over."

"We will continue to work closely with the IRS and our international partners to ensure that our tax laws are enforced fully and fairly, and that the rule of law is vindicated," he stated. "We congratulate the IRS and the Department’s Tax Division, as well as our partners in the Swiss government, for this achievement."

Last August, an agreement was signed between the US and Switzerland which ended a legal dispute over UBS, in which the US sought the disclosure of some 52,000 UBS account holders’ names in its campaign against tax evasion through accounts held abroad. The US, however, had to be satisfied with the details of 4,450 account holders, which are being handed over via information exchange provisions in the Swiss-US double taxation treaty.

According to the Justice Department, six US customers of UBS whose information was provided pursuant to the Deferred Prosecution Agreement have been successfully prosecuted, while investigations are being conducted on "dozens" of other UBS customers.

The Department of Justice and IRS also made public the criteria set out in the settlement reached in the civil John Doe summons suit against UBS, which governed the selection of the most "egregious" account holders to be identified as part of the settlement. The criteria cover accounts of various amounts and types, including bank-only accounts, custody accounts in which securities or other investment assets were held and offshore company nominee accounts through which an individual indirectly held beneficial ownership.

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