IRS Continues Offshore Bank Account Crackdown in 2013

The IRS has started 2013 with a win by obtaining a guilty plea from Wegelin for conspiring with U.S. taxpayers and others to hide more than $1.2 billion in secret Swiss bank accounts.    Further, the monetary fines imposed total more than $74 million.


No banking institution is too great to escape
IRS crackdown on offshore tax evasion

US Attorney, Preet Bharara is quoted in the Department of Justice press release regarding the guilty plea:  “today’s guilty plea is a watershed moment in our efforts to hold to account both the individuals and the banks – wherever they may be in the world – who are engaging in unlawful conduct that deprives the U.S. Treasury of billions of dollars of tax revenue.   We will continue our efforts until this practice is eliminated in its entirety.”

From our perspective the U.S. government in obtaining this plea is significant in that the United States was able to bring this case against a bank with no presence in the United States.    Further, by bringing these charges and assessing the tax fines, the IRS has given a clear indication that the U.S. will continue to aggressively hunt down and prosecute off-shore bank account holders.

We currently represent a number of individuals who have taken advantage of the Offshore Voluntary Disclosure Program (OVDP) as well as those who are currently the subject of grand jury investigations.     This means that we will likely see additional tax prosecutions and monetary fines assessed to individuals stemming from the Wegelin plea. Further, there are an additional 10 foreign banks currently under investigation that may use their client lists as leverage in negotiating plea agreements or deferred prosecution agreements with the U.S. government.

The fall of Wegelin, which has been in operation since 1741, has shown that no institution is too great to escape the IRS crackdown on offshore tax evasion.   Individuals who believe they may be the subject of an offshore bank account investigation, or simply want to ensure that they properly declare their international accounts, should seek the advice of a tax attorney.     Moskowitz LLP, a Tax Law Firm in the Financial District of San Francisco, offers its clients a comprehensive array of international tax services in addition to IRS reporting issues. We prepare federal and multi-state tax returns for United States expatriates and foreign nationals. We also provide our clients with international tax planning advice which includes planning for inbound and outbound transactions. In addition, we analyze international tax treaties and advise our clients on favorable tax positions in regards to international tax treaties, as well as represents clients that are accused of tax wrongdoing.

Additional articles of interest:

Understanding How FATCA Impacts You
Offshore and Foreign Compliance
International Tax Representation Success Stories

Disclaimer:  Because of the generality of this blog post, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Prior results do not guarantee a similar outcome. Furthermore, in accordance with Treasury Regulation Circular 230, we inform you that any tax advice contained in this communication was not intended or written to be used, and cannot be used, for the purposes of (i) avoiding tax related penalties under the Internal Revenue Code, or (ii.) promoting, marketing, or recommending to another party any tax related matter addressed herein.