In Wake of UBS Settlement, IRS Starts New Office to Monitor International Tax Fraud Among Wealthy

September 8, 2009 by David S. Seltzer

As a Miami tax evasion criminal defense attorney, I was not surprised to see evidence that the U.S. Internal Revenue Service is planning to extend its efforts to fight tax fraud. According to a Sept. 1 article by Bloomberg News, the IRS has advertised among its employees to staff a new office dedicated to monitoring the “global high-wealth industry.” This office will have the responsibility of processing the information on 4,450 accounts that UBS agreed to turn over in its settlement of a lawsuit against it by the IRS. The IRS sued the Swiss bank after it refused to turn over information in a related criminal case, in which the bank admitted to intentionally helping U.S. taxpayers dodge their taxes through deception and elaborate networks of dummy corporations.

In part because so many tax evaders use dummy corporations, the new IRS department will be located within the agency’s Large and Mid-Size Business division. According to Bloomberg News, that’s the division with the most experience navigating the issues that apply to high-net-worth individuals with international holdings, such as tax treaties and international business structures, and a division with an embedded legal department. Currently, responsibility for auditing wealthy people is split between divisions handling small business, self-employed people and investors -- and not all of those divisions have experience in international transactions. The IRS has already asked Congress to approve funding to hire 784 new full-time workers to better enforce international tax laws. As a Fort Lauderdale tax evasion defense attorney, I believe this means this issue goes beyond UBS -- we can expect stricter enforcement of tax evasion laws in the future.

Tellingly, the Bloomberg article notes that the IRS expects up to 10,000 new tax evasion cases related to UBS -- more than twice the number expected to come through the settlement. The new cases are expected because of the popularity of the agency’s voluntary disclosure program, which offers limited immunity from tax evasion prosecution for accountholders who come forward before they are charged with any tax crime. Taxpayers still must pay back taxes and penalties, but they escape much more serious penalties and potential prison time by being honest. As I have noted on this blog before, the program has already generated more responses in one month than the IRS got in all of 2008. However, the deadline for making a voluntary disclosure is just two weeks away -- Sept. 23 -- so the agency may see even more disclosures soon.

As a South Florida tax evasion criminal defense lawyer, I represent taxpayers in Florida and around the world who need help coming forward in a way that protects their rights. Taxpayers must follow specific requirements in order to qualify for the program, and not all of their personal financial information is necessarily required in a voluntary disclosure. I can help taxpayers start the process; represent them in their dealings with the IRS, including the in-person interviews the agency has been demanding; and negotiate for the best, fairest possible penalties. With the deadline just two weeks away, it’s more important than ever for taxpayers who are in this position to take action quickly to avoid the very serious consequences of a federal criminal conviction. To set up a free consultation with an experienced attorney, please call 1-866-ARRESTED from anywhere within Florida or 1-866-685-3421 nationwide, 24 hours a day and seven days a week, or contact me online.