Nearly 15,000 Enter Into Settlement With IRS Over Foreign Accounts

(The Intelligence Daily) -- Deputy Attorney General David W. Ogden released the following statement regarding the announcement today by the Department of Justice and the Internal Revenue (IRS) regarding the results arising from previous settlements of civil and criminal cases against Swiss banking giant UBS AG.

The Justice Department and IRS announced that over 14,700 taxpayers have come forward to report previously-undisclosed foreign bank accounts under the voluntary disclosure program the IRS implemented following the settlement. This figure represents almost double the initial numbers the IRS announced in October and dwarfs the number of voluntary disclosures received in 2008.

“The Department of Justice is pleased with the extraordinary results achieved from this landmark settlement,” said Deputy Attorney General Ogden. “The message to American taxpayers is clear: the era of bank secrecy and hidden assets is over. We will continue to work closely with the IRS and our international partners to ensure that our tax laws are enforced fully and fairly, and that the rule of law is vindicated. We congratulate the IRS and the Department’s Tax Division, as well as our partners in the Swiss government, for this achievement.”

These voluntary disclosures, while extremely significant, are but one more step in the IRS and the Department’s efforts to hold those U.S. taxpayers who have undisclosed foreign accounts responsible for their actions. These efforts began in February 2009, with UBS AG’s agreement to enter into a groundbreaking deferred prosecution agreement, admitting guilt on charges of conspiring to defraud the United States by impeding the IRS. As part of the agreement, UBS immediately provided the United States with the identities of, and account information for, a number of U.S. UBS customers and paid $780 million in fines, penalties, interest, and restitution. The Department’s Tax Division worked hand-in-hand with the U.S. Attorney’s office in the Southern District of Florida to obtain these unprecedented results.

To date, the Justice Department has successfully prosecuted six U.S. customers of UBS whose information was provided pursuant to the Deferred Prosecution Agreement, and is conducting investigations of dozens of other UBS customers.

In addition to the deferred prosecution agreement, in August of this year, the IRS, the Justice Department, UBS and the Swiss Government, entered into a similarly landmark agreement, in the John Doe summons action, whereby the IRS was to receive thousands of additional undisclosed UBS accounts.

These criminal and civil efforts have, for the first time, breached Swiss bank secrecy and prevented taxpayers from hiding from the IRS regardless of the cross border nature of their accounts.  Within the United States, there has been an unprecedented increase in the number of taxpayers who have come forward to voluntarily disclose the existence of their foreign bank accounts and agree to pay tens of millions of dollars to the treasury.

The Department of Justice and IRS also made public the criteria set out in the settlement reached in the civil John Doe summons suit against UBS, which governed the selection of account holders to be identified as part of the settlement. The criteria cover accounts of various amounts and types, including bank-only accounts, custody accounts in which securities or other investment assets were held and offshore company nominee accounts through which an individual indirectly held beneficial ownership.  These criteria allow the IRS and the Justice Department to target the most egregious foreign account holders.


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