U.S. taxpayers with undisclosed foreign accounts may be losing sleep because of continuing efforts by the Department of Justice and IRS to ferret out and serve civil and/or criminal sanctions on other taxpayers and their advisors. Just this week, as reported in Businessweek, Martin Lack, a former UBS AG advisor, surrendered this week to U.S. authorities in Miami as a result of a 2011 indictment for allegedly helping U.S. clients hide assets overseas. And the U.S. Government has no qualms about publicizing the punishment served on persons like Mr. Lack. The names of taxpayers and advisors that have been prosecuted or indicted, is available on the IRS website along with a description of the illicit behavior and punishment (when applicable). Consequences of the U.S. Government’s efforts are not limited to fines and incarceration. Two Swiss private banks (Wegelin and Frey & Co.) closed their doors as a result of the enforcement actions being undertaken by the U.S.
Many taxpayers have opted to participate in the Offshore Voluntary Disclosure Programs offered by the IRS, which remain available to those that have not yet come forward. Others, as reflected on the IRS website, have been indicted and some already sentenced. For those taxpayers that have not yet taken any action, there remains the risk that the government will catch up with them at some point. Those taxpayers should consider consulting with an attorney who has experience advising and assisting clients on the available options and the disclosure process.