Jail Sentence for Investment Advisor with Unreported UBS Account
An investment advisor was sentenced to one year in jail and six months house arrest for failing to report his foreign accounts at UBS. His name was one of the 250 names of account holders that UBS gave to the IRS when UBS settled allegations of aiding and abetting tax fraud. (Another 4,500 names are in the process of being transferred to the IRS.) The accounts were held in the names of Panamanian and British Virgin Islands corporations. As we’ve noted earlier, although the IRS has targeted accounts owned in the names of offshore entities like corporations and foundations, non-compliant accounts in individual names are targeted also. As part of the criminal sentence, the judge imposed a penalty of $4.4 million, representing 50% of the value of the foreign accounts.
We continue to represent people interested in bringing their foreign accounts into tax compliance. Through the IRS voluntary disclosure program, clients can avoid criminal prosecution by paying their back taxes and penalties. The IRS will welcome a voluntary disclosure provided that the funds in the foreign account are not criminally derived, the IRS is not already investigating the account owner and does not already know about the foreign account. If these pre-requisites are met, the foreign account can be made tax compliant, criminal prosecution can be avoided and the client can sleep at night. However, timing is crucial: come see us before the IRS sees you.