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Monday, December 15, 2008

NLJ: IRS Probe of Offshore Accounts Keeps Lawyers Busy

National Law Journal:  Offshore Accounts Causing Angst; The IRS' Stepped-up Probe of Swiss UBS Is Keeping Lawyers Busy, by Pamela A. MacLean:

Wealthy Americans with secret offshore accounts, nervous about stepped-up IRS investigations of Swiss bank UBS A.G., have scurried to tax specialists for help to negotiate deals that will keep them out of jail and lower the tax hit.

There are an estimated 20,000 clients of UBS suspected of conspiring with the bank to hide as much as $20 billion in assets overseas to skirt federal taxes, according to the November indictment of one UBS executive. An estimated 300 of those may be trying to make deals with the government — not as many as expected, given the consequences. ...

The significance of the IRS and Justice Department's crackdown is how it differs strategically from prior high-profile tax shelter investigations, such as the KPMG tax fraud case in New York, said Chris Steskal, a white-collar defense partner in the San Francisco office of Mountain View, Calif.-based Fenwick & West who oversees its regulatory practice.

In the KPMG tax shelter case, the government did not go after individual taxpayers who benefited from shelters, due in part to the complexity of the prosecutions and difficulty proving intent, he said.

By contrast, the government is going after 20,000 of UBS' American clients as "co-conspirators" who benefited from the secret accounts, according to the November indictment of UBS executive Raoul Weil in U.S. v. Weil, No. 08-60322 (S.D. Fla.). The government is currently fighting to force UBS to turn over the names on all the secret numbered accounts

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