UBS Cooperation with IRS leads to Criminal Charges Involving Offshore Bank Accounts

Tax attorneys continue to deal with the fallout from increased offshore enforcement by the IRS.

The U.S. Justice Department announced this month that a San Diego resident was sentenced to three years probation after he was found to have filed false tax returns from 2000 to 2008. The case involved overseas bank accounts the defendant had with UBS and Credit Suisse in the Bahamas and Switzerland.

The Offshore Voluntary Disclosure Initiative allows taxpayers the chance to avoid criminal prosecution by voluntarily disclosing offshore bank accounts to the Internal Revenue Service. Civil penalties and interest still apply. The government requires taxpayers to file a Foreign Bank Accounts Report (FBAR) for offshore accounts valued at more than $10,000.

Jeffrey Chatfield was convicted of hiding assets in the offshore accounts. In addition to three years of probation, Chatfield was ordered to pay $96,000 to the IRS to resolve his civil liability for not filing FBARs. The government claimed he opened an account at UBS Bahamas LTD in 2000, depositing $900,000 in cash and untaxed securities that he received from consulting work.

Our tax attorneys have reported previously here on our Tax Problem Attorney Blog that such accounts frequently come to light as a result of bankers and tax advisers who are in trouble with the law, or banks that cooperate with tax authorities. That was the case here.

By 2008, the defendant’s account was with Credit Suisse, which notified him that it was closing all accounts held by U.S. taxpayers. In February 2009, UBS entered into a deferred prosecution agreement, in which it admitted to helping U.S. taxpayers hide accounts from the IRS. As a part of that agreement, it agreed to provide U.S. authorities with the identifies and account information of some U.S. customers.

Those who are dealing with tax problems involving offshore bank accounts, or those who are trying to best determine how to resolve voluntary disclosure issues, should consult an experienced tax attorney capable of explaining their options and fighting for their rights.

If you have undisclosed offshore bank accounts, or other tax problems, contact the