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UBS Bank Closing All U.S.-held Offshore Accounts May Cause New Hazards for Taxpayers

Posted in Articles & Publications on January 15, 2009 | Share

Last week, Swiss banking giant UBS AG (UBS) reported that it will close all secret offshore accounts held by U.S. accountholders amid growing pressure from U.S. tax authorities investigating potential tax avoidance by U.S. taxpayers.  The move aids federal authorities in investigating accountholders for filing false tax returns, willful failure to disclose accounts, tax evasion and tax fraud by exposing evidence of the undisclosed accounts.  As discussed earlier this month in the Williams Mullen Tax Law Team Alert, U.S. Government Targets UBS Offshore Account Holders, federal authorities estimate that 19,000 U.S.-held UBS accounts have been used to hide $18 billion in assets - or $300 million in tax liabilities - each year. 

UBS will either transfer the accountholder funds to other banks of the accountholder’s choosing or to other accounts within UBS that are registered with the U.S. authorities.  If accountholders transfer their funds to a foreign bank they are required to report transfers in excess of $10,000 to the U.S. Treasury Department.  Alternatively, UBS will mail checks for the full value of the account directly to the accountholders.  Accountholders can cash their checks and create a paper trail or not cash these checks and loose the value of their assets – effectively creating a catch-22 for the accountholder.   

The closing of these offshore accounts by UBS raises the stakes for U.S. taxpayers.  Specifically, by closing the accounts, UBS increases the likelihood that the IRS will identify undisclosed accounts and accountholders.  Once the IRS identifies the accountholder, it can begin an investigation of the accountholder and pursue felony charges against the taxpayer for failing to report the account and pay taxes on the account’s income.  Any U.S. taxpayer who has an offshore UBS account and receives notice that their offshore account has been closed should contact the Thorn Law Group. 

For more information on this matter, see UBS Bank Closing All U.S.-held Offshore Accounts May Cause New Hazards for Taxpayers at  www.thorntaxlaw.com or contact Kevin E. Thorn at 202-270-7273 or ket@thornlawgroup.com.

UBS Bank Closing All U.S.-held Offshore Accounts May Cause New Hazards for Taxpayers is provided as an education service and is not intended to be and should not be construed as legal advice.  Readers with particular needs on specific issues should retain the services of competent counsel. 


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