U.S. Cracking Down on Offshore Accounts in Singapore

Posted in Offshore Account Update on May 13, 2016 | Share

The Internal Revenue Service and Department of Justice have been very aggressive in pursuing cases against Swiss banks and getting those banks to turn over information on accountholders. More than 80 Swiss banks have paid around $5 billion in penalties and fines and have provided detailed information on people with offshore accounts.

The U.S. efforts have effectively destroyed the long tradition of banking privacy in Switzerland. Now, evidence suggests the U.S. government is trying to do the same thing with banks in Singapore, where U.S.-affiliated accountholders may be putting their money to avoid taxes.

A Washington DC tax evasion attorney can help those who have money in banks in Singapore. If you have undeclared offshore accounts and haven't filed your annual Report of Foreign Bank and Financial Accounts (FBAR), you could face substantial penalties.

Participation in the Offshore Voluntary Disclosure Program (OVDP) can limit penalties, but it is possible to participate only if you aren't already under investigation.  You may wish to take action and voluntarily disclose accounts before the U.S. crackdown in Singapore begins in earnest and it becomes too late.

Why Focus on Singapore?

Singapore's bank secrecy laws prevent disclosure of account records without permission from accountholders.  However, the United States is trying to get access to bank records anyway. The IRS has asked a federal judge in Miami to force a Swiss Bank, UBS Group AG, to provide records on an accountholder named Hsaiw, who lives in China and whose account is held in Singapore. The IRS wants records from 2001 to 2011.

UBS indicated it could not produce Hsiaw's records for the Singapore account because of Singapore's banking secrecy laws.  However, the IRS served a summons on UBS for the account records and when UBS refused, the IRS petitioned the court asking it to require UBS to produce the documents. The court filing stated: “Even if Singapore’s bank secrecy laws, as UBS contends, precludes disclosure of the summoned bank records relating or pertaining to Hsiaw’s Singapore account(s), international comity requires that the records be disclosed.”

Banking officials familiar with Singapore's laws suggests Singapore is prepared to offer help in foreign criminal proceedings and will use established channels to share banking information. Singapore has in the past, lifted banking confidentiality rules in response to requests from foreign authorities and in situations where laws are used to shield criminal activities.

A former federal prosecutor suggests the IRS efforts in trying to compel production of the bank records amounts to “holding UBS hostage in the U.S. by saying you subjected yourself to U.S. jurisdiction, now produce these records outside the U.S.”  If the IRS repeats this protocol to request more account records, this could be a way for the IRS to start getting details on accounts in Singapore so they can go after U.S. accountholders.

Anyone with funds in a Singapore account who wishes to take part in OVDP before coming under investigation should consult with Kevin Thorn, a DC tax evasion attorney, soon before the IRS becomes even more aggressive in trying to get details on Singapore accounts.

Thorn Law Group

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