By Bryan C. Skarlatos and Michael Sardar
Taxpayers with unreported foreign bank accounts are sweating bullets these days. The IRS is in the midst of an unprecedented crackdown on foreign bank accounts. The primary example is the criminal prosecution of UBS (f/k/a Union Bank of Switzerland). In February 2009, the criminal case was resolved by a deferred-prosecution agreement pursuant to which UBS agreed to pay a huge fine, cooperate with the IRS, and turn over the names of approximately 285 U.S. taxpayers with accounts at the bank. Shortly thereafter, UBS settled a civil summons proceeding with the IRS and agreed to provide the identities of another 4,450 U.S. taxpayers with accounts at the bank. These developments caused a surge of 15,000 taxpayers with foreign bank accounts to disclose voluntarily their previously unreported accounts to the IRS.