Now that the UBS settlement is approved by the Swiss Parliament and the transfer of account information to the IRS is proceeding, the IRS is analyzing the account information that it is receiving, launching investigations against account holders, and prosecuting account holders for not reporting the accounts and not paying taxes on income earned in those accounts. The IRS is also moving past UBS and investigating other banks, in other countries.
"India is one target of investigation and we understand that the IRS is also focusing on accounts in Israel. We are getting many calls from people with accounts in India and Israel, and also Hong Kong and Singapore, who are looking to put their banking affairs in order," he said. "Also important are the subtle but significant changes in IRS voluntary disclosure practice."
There are rumors that voluntary disclosures made after June 18, when the Swiss Parliament approved the UBS settlement, will not be accepted, he said. The theory is that once the Swiss Parliament approved the settlement, disclosures are not sufficiently voluntary. In practice, however, numerous clients are still coming forward and making disclosures after June 18, and their disclosures are not being rejected.
The "pre-clearance" process of the voluntary disclosure (whereby the IRS advises as to whether the IRS already has the name of the account holder, which would render the disclosure too late), has also changed, slightly but significantly. In the past, to request pre-clearance, it was necessary only to provide the individual's name, address, social security number and date of birth. This is sufficient information whereby the IRS could acknowledge whether it already had knowledge of the individual, in which case pre-clearance would come back denied, or wheth er the individual was pre-cleared to continue the voluntary disclosure.
Today, however, the IRS is asking for the name of the foreign bank in order to process the pre-clearance. The name of the bank is potentially incriminating information. If pre-clearance is denied, then the IRS already has the person's name, plus the foreign bank, which makes investigation and prosecution easier for the IRS. The IRS has changed its procedure to require incriminating information in advance of any indication of acceptance into the voluntary disclosure program. This could have a chilling effect on future voluntary disclosures, because people will not be handing over incriminating information without the slightest indication of whether they will be accepted by the IRS, Rubinstein said.
However, if the individual is not concerned with being rejected from the program (for example, the foreign funds are not illegal source funds), then it may still make sense to provide the bank information and proceed with the disclosure. The benefit of disclosure -- lower penalties and avoidance of criminal prosecution -- may outweigh the provision of potentially incriminating information, especially when there is little risk of non-acceptance into the voluntary disclosure program., , , (New York, NY) The Swiss Federal Tax Authority continues to transmit
once-secret banking files to the IRS, as per settlement agreement
reached with Swiss financial company UBS. Americans whose UBS accounts
are being revealed to the IRS and who have not already come forward and
voluntarily disclosed their accounts can expect to be on the receiving
end of an IRS investigation or subpoena, said New York asset protection
attorney, Asher Rubinstein., publish, open, , , IRS steps up analysis of foreign bank accounts and voluntary disclosures, 2011-11-07 20:50:35, , 0, , UBS, Switzerland, Swiss, Bank, Account, IRS, Internal Revenue Service, 0, 1, 1, article, 0, 0, 0, 2010-09-09, 2, 2">
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