Asher Rubinstein quoted in Dow Jones/Wall Street Journal article
Asher Rubinstein was again quoted in Dow Jones/Wall Street Journal article “IRS Details Map to Find UBS Tax Fraud”, about the criteria by which Switzerland will disclose previously-secret bank accounts to the IRS.
GETTING PERSONAL: IRS Details Map To Find UBS Tax Fraud
By Arden Dale
A DOW JONES NEWSWIRES COLUMN
The writing is on the wall for Swiss bank account holders still hoping to hide from U.S. tax authorities.
The Internal Revenue Service on Tuesday made public a document it gave the Swiss government earlier this year to help it track down tax evaders. Part of a deal in which the Swiss are to hand over 4,450 UBS AG (UBS) account holder names, it details what to look for–including “a scheme of lies”–when digging for tax fraud.
Still, the document probably won’t make a big difference to anyone with an unreported account at this point, tax lawyers say. Americans who have not yet stepped forward to disclose an account at any Swiss bank “know they are doing something wrong, and given the events of 2009, it’s unbelievably unlikely that the IRS won’t find them,” says Asher Rubinstein, a partner at law firm Rubinstein & Rubinstein, LLP.
The momentum, he adds, is “clearly in the IRS favor.”
IRS Commissioner Doug Shulman, on a call with reporters, called the document a “critical component” of the agreement with Switzerland, which was forged last summer. It has helped tax authorities home in on accounts in three areas of particular interest: those that represent the most egregious examples of tax evasion; those that would have been especially hard for U.S. authorities to discover, and–last but not least–the biggest accounts.
Overall, said Shulman, these are accounts held by “people most likely to have been involved in tax evasion, and most likely to be targeted by UBS in marketing efforts.”
Several groups of account holders are described as targets of inquiry in the document. They include U.S. clients of UBS with unreported accounts that held over $1 million Swiss francs at any point during 2001 and 2008, and that raised suspicion of tax fraud.
Another group are people considered U.S. “persons,” regardless of where they lived, with offshore company accounts established or maintained between 2001 and 2008, and which raised suspicion of tax fraud.
Accounts with more than $250,000 Swiss francs and that show evidence of a so-called “scheme of lies” are also targeted.
As for the definition of tax fraud, a brief series of bullet points mention submission of false documents, failing to provide Form W-9s over a certain number of years, using inappropriate people as conduits to transfer funds, and even using calling cards to disguise the identity of people trading on an account.
Though these criteria were part of the earlier agreement, they have not been made public until now. IRS officials said Tuesday that they were used to identify hundreds of UBS clients who got letters from the bank warning they were in the sights of U.S. tax authorities. The agency declined to comment on how many of the 4,450 UBS account holder names it has already gotten from the Swiss under its agreement.
The IRS also said that 14,700 account holders have come forward under a special amnesty program it held earlier in the year. That program offered special penalty caps for voluntary disclosures through Oct. 15, and doesn’t overlap with the 4,450 names under the UBS agreement.
The IRS has agreed to drop a John Doe summons against UBS if 10,000 UBS account holders come forward through its voluntary disclosure. Agency officials declined to comment on how many of the 14,700 are UBS account holders, however.
(Arden Dale is a Getting Personal columnist who writes about personal finance; she covers topics including tax and estate planning, retirement, investment strategies, and financial needs of small businesses. She can be reached at 212-416-2234 or by email at firstname.lastname@example.org.)
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