The crackdown on banks continues, as UBS AG once again faces legal questions from the IRS and the Justice Department.  Federal authorities are not only going after banks that helped clients hide cash in offshore accounts, but they are now looking at whether UBS AG facilitated the purchase of investments that are banned in the United States. The new DOJ and IRS probe is focused on whether UBS allowed the purchase of bearer securities as part of efforts to help clients evade US tax obligations.

For U.S. citizens, any income earned worldwide must be reported. You must submit a Report of Foreign Bank and Financial Accounts (FBAR) every single year, along with IRS Form 8938. If you have not done this, you may want to participate in the Offshore Voluntary Disclosure Program (OVDP) to limit consequences for non-reporting.

The Department of Justice and the IRS are aggressively pursuing tax evaders and are approaching the crackdown on tax evasion from multiple angles. From targeting bankers to taking criminal action against individual investors, the U.S. government is determined to stop people from parking their money offshore to avoid paying taxes.

The chairman of Parsons & Whittemore, an international pulp mill company, recently pled guilty to a willful failure to declare offshore accounts to the IRS.  The CEO, George Landegger, will be sentenced in May of 2015 and could face up to five years of incarceration. As part of a guilty plea, he has also agreed to pay back taxes of $71,000, as well as a civil penalty of more than $4.2 million. 

The Department of Justice has entered into a deferred prosecution agreement with Bank Leumi Group. Bank Leumi admitted to helping U.S. investors hide money and assets in offshore accounts. Bank Leumi is another in the long line of financial institutions that has been investigated by the Justice Department.  Like most of the banks caught up in an investigation, the bank will turn over information on U.S. account holders.