By Bryan C. Skarlatos
Journal of Tax Practice & Procedure
December 2011 - January 2012 Edition
There is nothing illegal about owning a foreign bank account, but United States citizens or residents with foreign accounts must be careful to properly report such accounts on tax returns and reports of foreign bank accounts. By now, almost everyone knows the story of UBS and how the Department of Justice (the “DOJ”) and the IRS effectively broke through Swiss bank secrecy and compelled UBS to turn over names of thousands of its U.S. account holders. The important thing about the UBS story is that it is just the fi rst chapter of a longer narrative in which the DOJ, the IRS and Congress are continuing to hack away at bank secrecy laws, not just in Switzerland, but around the world, in an effort to force all U.S. citizens or residents with foreign bank accounts to report the existence of, and income earned in, those accounts. The latest development in this drum-beat of enforcement is the indictment of three Swiss bankers for conspiring with U.S. taxpayers to help them evade U.S. tax.