Undisclosed Offshore Financial Account Discovery Broadens

The search for tax evaders is turning into a modern day witch hunt.  Earlier this week, the French authorities raided the homes of UBS employees, and the German authorities raided the homes of Credit Suisse clients.

The German state of North Rhine-Westphalia paid €3.5 million for a CD containing details of approximately 1,000 German clients of the Swiss branch of Coutts, the Royal Bank of Scotland’s private banking division.  In 2010, several German states purchased CDs produced by whistleblowers, though the exact origin of this CD is unknown.

While you may think that this is happening only “over there,” this also has ramifications for US taxpayers that continue to have undisclosed offshore accounts.  An information sharing agreement with Germany led to the U.S. investigation of Credit Suisse accounts the first time.

The IRS’ Offshore Voluntary Disclosure Program is still in effect, but this is only available to taxpayers who are not currently under investigation, and eligibility may be terminated if the IRS is investigating the specific financial institution in which the applicant has an undisclosed account.

Please contact Larry Rubin, Aronson’s tax controversy lead partner, at 301.231.6200 for assistance or for further information.