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Posted by James Simango, CPA
James Simango, CPA
James Simango CPA (U.S. Qualified), CPA Australia, B.Sc (Fin)(Acc) James is a
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on Saturday, 28 January 2012
in US Expatriates

IRS Cracking Down On Banks With US Citizens

If you're thinking that you "got away" with not filing a tax return five years ago because the IRS never contacted you, it may come back to haunt you. Think Again. 

If you do owe back taxes and do not pay, you can incur additional penalties and interest for the time lapse of these unpaid taxes.

What are you waiting for? The sooner you take care of your delinquent tax return the better. Do not wait for the IRS to contact you first.

The IRS is cracking down on foreign banks making them report US citizens on the banks books. Wegelin & Co., the 270-year-old Swiss private bank, agreed to a sale to Switzerland’s Raiffeisen Group after coming under investigation in the U.S. for allegedly helping Americans evade taxes. Wegelin & Co., the 270-year-old Swiss private bank, agreed to a sale to Switzerland’s Raiffeisen Group after coming under investigation in the U.S. for allegedly helping Americans evade taxes.

UBS settled the U.S. tax-evasion scandal that threatened to bring the banking giant to its knees. UBS agreed on February 18, 2009 to pay a fine of $780 million to the U.S. government and entered into a deferred prosecution agreement on charges of conspiring to defraud the United States by impeding the Internal Revenue Service. As part of the deal, UBS also settled Securities and Exchange Commission charges of having acted as an unregistered broker-dealer and investment adviser for Americans.

In July 2008, a United States Senate panel accused Swiss banks, including UBS and LGT Group, of helping wealthy Americans evade taxes through offshore accounts. U.S. clients held about 19,000 accounts at UBS, with an estimated $18 billion to $20 billion in assets, in Switzerland, according to the findings. In response to the report and the FBI investigation, UBS announced that it would cease providing cross-border private banking services to US-domiciled clients through its non-US regulated units as of July 2008.

The U.S. government agreed last August to drop tax-evasion charges against UBS after Switzerland promised it would transfer the details of around 4,450 clients that UBS had helped to dodge taxes. The transfer lifted the veil on Switzerland's cherished tradition of banking secrecy.

UBS, in a statement, said it was "pleased" to learn the Swiss authorities would transfer the names and meet terms of the U.S. agreement.

"UBS expects that implementation of the treaty will be completed in the coming weeks, although the exact date of completion is not yet defined," UBS said.

UBS's wealthy clients left in droves, with the threat of renewed legal action looming if Switzerland failed to deliver on its promises to release the account names within a year of the U.S. deal being struck.

“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have billions of dollars in hand from our previous efforts, and we have more people wanting to come in and get right with the government. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system.”

The Internal Revenue Service today reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs.

Foreign Banking Account Reporting (FBAR) rules apply to all U.S. individuals and organizations and across all industries and are not limited to financial services. Compliance with these rules is likely to be a significant undertaking for many organizations. Time is of the essence, because of the effort required to gather required information and to prepare FBAR forms. Penalties associated with failure to report these accounts can be significant and proper preparation is important.

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James Simango


CPA (U.S. Qualified), CPA Australia, B.Sc (Fin)(Acc)



James is a licensed CPA in both the U.S. and Australia. He specializes in cross border tax issues between the U.S. and Australia.

He is a member of the American Institute of Certified Public Accountants (AICPA), CPA Australia, and is registered with the California Board of Accountancy, Virginia Board of Accountancy. James earned his Bachelor’s of Science in Finance and a Bachelor's of Science in Accounting from the Central Michigan University in the United States. Being both a U.S. and Australian qualified CPA, James brings you a more comprehensive view on your tax obligations and tax planning either in the U.S. and Australia.

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