Developments of Interest

Singapore the new Switzerland:

On September 22, 2010 the NY Times Global ran an article entitled Bank Secrecy in Asia. In this article they suggest that the 800 new IRS agents will be assigned to target HK and Singapore. Click here to read the article.

You should be very concerned if you have undisclosed assets/accounts in Hong Kong and/or Singapore. Contact our office for direction on how to proceed. We can set up a meeting with a tax attorney for you to discuss your case in greater detail.

Treasury Inspector General (TIGTA) finds 10% of Foreign Earned Income Exclusions claimed in 2008 are invalid. Click here to read the report.

FBAR Related Court Cases:
United States v. J. Bryan Williams; No. 1:09-cv-00437
Court says Government failed to establish that taxpayer “willfully” concealed offshore accounts.

Legal Developments:

In April 2013, a federal district court authorized the IRS to issue a “John Doe” summons seeking information about U.S. taxpayers who may hold undeclared offshore accounts at CIBC FirstCaribbean International Bank (FCIB), a Barbados-based bank with branches across the Caribbean. The summons, issued to Wells Fargo N.A., seeks records of U.S. taxpayers and financial institutions that used FCIB’s United States correspondent account at Wells Fargo to evade taxes. Read the article here.

In January 2013, the U.S. Attorney’s Office in the Southern District of New York secured the guilty plea of Wegelin Bank, the oldest private bank in Switzerland and the first foreign bank to plead guilty to felony tax charges. The bank admitted to conspiring to defraud the United States by helping U.S. account holders hide assets from the IRS in undeclared accounts. Read the article here.

A federal district court has also authorized the IRS to issue a “John Doe” summons that will allow the United States to determine the identity of U.S. taxpayers who may hold accounts at Wegelin and other banks based in Switzerland to evade federal income taxes.

The Tax Division has opened investigations into numerous additional offshore banks located in Switzerland, India, Israel and elsewhere. From 2008 through April 2013, the Tax Division has charged over 30 banking professionals and 60 account holders, thus far resulting in five convictions after trial and 55 guilty pleas, including 2 trial convictions and 16 guilty pleas in the first four months of 2013 alone.

UPDATE: Jan 2009

UBS is closing all offshore accounts of U.S. clients as it comes under pressure from the IRS. Many U.S. clients of UBS have already voluntarily submitted themselves to the IRS thus avoiding more serious punishment. Clients closing accounts will have the option of transferring assets to onshore wealth management units in the US, Switzerland, or Hong Kong or receive a check (thus creating a paper trail for U.S. federal prosecutors who are reviewing the files now to see if such accounts were used to evade taxes.) Sources:Singapore Business Times, Wall Street Journal. Reuters.

JULY 1 2008.

Federal Judge Approves IRS Summons For UBS Swiss Bank Account Records:
A Federal Judge in Miami issued an order authorizing the IRS to obtain information from Zurich, Switzerland-based UBS AG about U.S. taxpayers who may be using the Swiss bank accounts to evade federal income taxes. The “John Doe” Summons comes after a former UBS banker submitted a statement alleging that $20 billion of assets under UBS AG’s management in “undeclared” accounts.