Offshore Accounts Come Home to Roost

Article excerpt

Over the next several months, the Department of Justice plans to follow up on all leads regarding offshore tax dodging that it has obtained via voluntary disclosures, as various banks have come forward to try to purify themselves, reports Alan Olsen, Managing Partner of Greenstein, Rogoff, Olsen & Co., LLP, San Francisco.

"We expect over the next couple of years to have somewhere between 4,000 and 7,000 cases coming to us. These are from banks and governments cooperating with us," affirms Kevin Downing, a senior tax attorney with the Department of Justice.

According to Reuters, some private banking clients are choosing to close Swiss accounts and carry cash by hand back to the U.S. to avoid an electronic trail, only to be caught by U.S. law enforcement officers. Not realizing the money is traceable, they then are penalized for tax evasion and smuggling. Since the start of the U.S. crackdown on tax evasion, money has moved from the Caribbean to Switzerland and Asia, Olsen adds.

The DOJ objective is to bring taxpayers who have used undisclosed foreign accounts and entities to avoid or evade tax into compliance with U.S. tax laws. The information gathered from taxpayers making voluntary disclosures under this practice will be used to further the Internal Revenue Service's understanding of how foreign accounts and foreign entities are promoted to American taxpayers as ways to avoid or evade tax. …