14,700 offshore account taxpayers came forward

[Demosthenes]

FOR IMMEDIATE RELEASE TAX
TUESDAY, NOVEMBER 17, 2009 (202) 514-2007
http://WWW.JUSTICE.GOV TDD (202) 514-1888
JUSTICE DEPARTMENT & IRS ANNOUNCE RESULTS OF UBS SETTLEMENT & UNPRECEDENTED RESPONSE IN VOLUNTARY TAX DISCLOSURE PROGRAM

WASHINGTON – Deputy Attorney General David W. Ogden released the following statement regarding the announcement today by the Department of Justice and the Internal Revenue (IRS) regarding the results arising from previous settlements of civil and criminal cases against Swiss banking giant UBS AG. The Justice Department and IRS 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 settlement. This figure represents almost double the initial numbers the IRS announced in October and dwarfs the number of voluntary disclosures received in 2008.

“The Department of Justice is pleased with the extraordinary results achieved from this landmark settlement,” said Deputy Attorney General Ogden. “The message to American taxpayers is clear: 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. We congratulate the IRS and the Department’s Tax Division, as well as our partners in the Swiss government, for this achievement.”
These voluntary disclosures, while extremely significant, are but one more step in the IRS and the Department’s efforts to hold those U.S. taxpayers who have undisclosed foreign accounts responsible for their actions. These efforts began in February 2009, with UBS AG’s agreement to enter into a groundbreaking deferred prosecution agreement, admitting guilt on charges of conspiring to defraud the United States by impeding the IRS. As part of the agreement, UBS immediately provided the United States with the identities of, and account information for, a number of U.S. UBS customers and paid $780 million in fines, penalties, interest, and restitution.

To date, the Justice Department has successfully prosecuted six U.S. customers of UBS whose information was provided pursuant to the Deferred Prosecution Agreement, and is conducting investigations of dozens of other UBS customers.
In addition to the deferred prosecution agreement, in August of this year, the IRS, the Justice Department, UBS and the Swiss Government, entered into a similarly landmark agreement, in the John Doe summons action, whereby the IRS was to receive thousands of additional undisclosed UBS accounts.

These criminal and civil efforts have, for the first time, breached Swiss bank secrecy and prevented taxpayers from hiding from the IRS regardless of the cross border nature of their accounts. Within the United States, there has been an unprecedented increase in the number of taxpayers who have come forward to voluntarily disclose the existence of their foreign bank accounts and agree to pay tens of millions of dollars to the treasury.

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 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. These criteria allow the IRS and the Justice Department to target the most egregious foreign account holders.

[bmielke]

Didn't UBS hand over 4500 Names?

The Amnesty period really paid off if they got three times the number of offenders then they had names. I have also read that Tax Lawyers have seen an up tick in clients concerned about the whole situation so this is just the beginning.

[Demosthenes]

Didn't UBS hand over 4500 Names?

Not yet.

[bmielke]

Didn't UBS hand over 4500 Names?

Not yet.

Wow then the IRS/DOJ is really cleaning up. Just the threat of having your name turned over and people are running in.

Is it possible UBS may never hand over the names? At this point would DOJ/IRS even care anymore?

[Demosthenes]

Is it possible UBS may never hand over the names? At this point would DOJ/IRS even care anymore?

UBS has until August 2010 to turn in the names as part of a plea agreement in a criminal case. If they don't meet their end of the deal, they'll be prosecuted by the DOJ, and UBS very much wants to continue to do business in the US.

[bmielke]

Is it possible UBS may never hand over the names? At this point would DOJ/IRS even care anymore?

UBS has until August 2010 to turn in the names as part of a plea agreement in a criminal case. If they don't meet their end of the deal, they'll be prosecuted by the DOJ, and UBS very much wants to continue to do business in the US.

I didn't realize their was a criminal case.

[Demosthenes]

I need more coffee. My earlier answer was wrong.

UBS admitted tax fraud and paid 780 million dollars and identified the first 300 US clients to settle the criminal case.

This was followed by a civil case in February which resulted in the bank having to disclose 4,500 names.

Realistically, most of those 4,500 names have already done the voluntary disclosure thing, so UBS may not end up having to provide much data at all.

[Demosthenes]

http://www.nytimes.com/aponline/2009/11 ... asion.html

Filed at 9:41 a.m. ET

BERN, Switzerland (AP) -- American clients who hid more than 1 million Swiss francs in undeclared bank accounts with UBS AG between 2001 and 2008 could have their details turned over to the U.S. government, Swiss officials said Tuesday.

The Swiss government unveiled the criteria used to determine which 4,450 UBS customers risk disclosure to U.S. tax authorities as part of a deal to end major tax evasion investigation against the bank.

They also include Americans, living in the U.S. or elsewhere, who controlled offshore company accounts in 2001-2008, the government said.

Where there is evidence the clients engaged in ''fraudulent behavior,'' such as by falsifying documents, the threshold for disclosure is lowered to 250,000 francs. Customers who earned an average of over 100,000 francs a year for at least three years will also be targeted.

[bmielke]

I need more coffee. My earlier answer was wrong.

UBS admitted tax fraud and paid 780 million dollars and identified the first 300 US clients to settle the criminal case.

This was followed by a civil case in February which resulted in the bank having to disclose 4,500 names.

Realistically, most of those 4,500 names have already done the voluntary disclosure thing, so UBS may not end up having to provide much data at all.

Well the smart ones anyway, there will be some who think they can fight it.

[Chrisfs]

According to WSJ, http://online.wsj.com/article/BT-CO-200 ... 12656.html

The IRS also said that 14,700 account holders have come forward under a special amnesty program it held earlier in the year. That program offered special penalty caps for voluntary disclosures through Oct. 15, and doesn't overlap with the 4,450 names under the UBS agreement.

I love that this is happening. The classic 'Swiss Bank Account' is coming to an end.

[bilky]

I guess I question why this is so important. Seems like a publicity stunt. When our government is so addicted to spending this is a drop in the pond.

I guess a good analogy would be a child picking up a penny that her father dropped, and presenting it to him while he just placed a thousand dollar bet.

I am just disillusioned that this will help anything.

[Demosthenes]

Putting an effective end to offshore tax cheating is just like picking up a penny?

[bilky]

Putting an effective end to offshore tax cheating is just like picking up a penny?

When you spend what we do yes it is. How much money do you estimate this will save each year in relation to what we spend? Is it less or greater than .00001%? This would be a great thing if coupled with fiscal responsibility, but since we don't have fiscal restraint this seems meaningless to me.

So what percentage are we making up overall? Will our budget really be 3.1 trillion, or will it be more? You are perhaps right though as we are saving a little more than a penny to a thousand dollars, but how much more is the question. Does this really do anything significant?

[Demosthenes]

Instead of making up statistics, why don't you post the real ones.

I'll get you started. More than 14,000 tax cheats have come in from the cold so far. The taxes and penalties raised from just these cases is in the billions, and the assets they've disclosed are located in more than 70 countries (not just UBS in Switzerland). Add to this the fact that wealthy people now have a huge distrust of offshore tax havens and in the forseeable future, they will be avoiding such schemes like the plague.

The IRS and DOJ mangle a lot of cases/programs. This case wasn't one of them.

[Judge Roy Bean]

When you spend what we do yes it is. How much money do you estimate this will save each year in relation to what we spend? Is it less or greater than .00001%? This would be a great thing if coupled with fiscal responsibility, but since we don't have fiscal restraint this seems meaningless to me.

I think the message is far more important than the dollar amounts in many tax cases. One of the problems Washington faces is a the very real perception that if someone is rich or powerful (or especially rich and powerful) they can get away with things the rest of us can't.

[bilky]

Instead of making up statistics, why don't you post the real ones.

I'll get you started. More than 14,000 tax cheats have come in from the cold so far. The taxes and penalties raised from just these cases is in the billions, and the assets they've disclosed are located in more than 70 countries (not just UBS in Switzerland). Add to this the fact that wealthy people now have a huge distrust of offshore tax havens and in the forseeable future, they will be avoiding such schemes like the plague.

The IRS and DOJ mangle a lot of cases/programs. This case wasn't one of them.

Ok great I am happy as I pay my taxes and so should they. Pardon my cynicism though, but even if we save 100 billion a year doesn't that only come up to 3.2% of our projected budget this year? We will spend more of course, and some won't even be reported. That coupled with new monies being printed I wonder what the cause for joy is?

[bilky]

I think the message is far more important than the dollar amounts in many tax cases. One of the problems Washington faces is a the very real perception that if someone is rich or powerful (or especially rich and powerful) they can get away with things the rest of us can't.

Ah, this makes a sense to me. I do believe this. Still though this is little solace though considering people that make their livings off of capitol gains only pay 15% while I am subject to 15% for social security plus federal income taxes. So I still see the rich are beating me as far as taxes go. They still aren't paying their fair share.

Under your pretense though I agree: tax cheats need to be caught and if one is super rich and benefiting from our system they need to pay. I just wish our tax code was a little bit more equitable as far a percentages of incomes go.

[Demosthenes]

Pardon my cynicism though, but even if we save 100 billion a year doesn't that only come up to 3.2% of our projected budget this year? We will spend more of course, and some won't even be reported. That coupled with new monies being printed I wonder what the cause for joy is?

Raising 3.2% of the entire US spending budget through two lawsuits is pretty stunning.

[bilky]

Pardon my cynicism though, but even if we save 100 billion a year doesn't that only come up to 3.2% of our projected budget this year? We will spend more of course, and some won't even be reported. That coupled with new monies being printed I wonder what the cause for joy is?

Raising 3.2% of the entire US spending budget through two lawsuits is pretty stunning.

Good point; will it be that much though, and if it is how will it help Arizona's 15th district?

I still have a hard time being excited when I am so worried about how the government has gone crazy with spending and printing.

That isn't the IRS's fault, and this would be great if the aforementioned problems weren't there.

[Demosthenes]

The gov has indeed gone bat-shit insane with spending. But that's a political issue that is unrelated to the success of the UBS lawsuits.