Department of Justice Increases Pressure on Unreported Offshore Accounts

On February 23, the Justice Department issued an indictment against four Swiss bankers for allegedly conspiring to assist US taxpayers evade taxes through offshore banking accounts. The move was undoubtedly meant to highlight the very real consequences facing US taxpayers who continue to fail to disclose unreported offshore accounts, as well as to further incentivize taxpayer participation in the IRS’s recently announced voluntary disclosure initiative.

The indictment accuses the bankers of helping US taxpayers in avoiding taxes on some $3 billion in assets by setting up undeclared accounts and submitting fraudulent documents to the IRS. In an ironic twist, it is possible that the indictment arose from information obtained by taxpayers participating in the IRS’s first voluntary disclosure initiative.

Regardless of where or how the IRS obtained the information needed to issue the indictments, however, tax practitioners believe one thing to be beyond doubt. In the words of Diana Erbson of DLA Piper, “It is clear that the enforcement web is tightening around noncompliant taxpayers and their advisers.”

Luckily for those noncompliant taxpayers, they still have several months to voluntarily come clean with the IRS, thus avoiding many civil and criminal sanctions they would otherwise face.  To learn more about the 2011 Offshore Voluntary Disclosure Initiative, go to,,id=234900,00.html.

For assistance with disclosure of offshore accounts as part of the 2011 Offshore Voluntary Disclosure Initiative please contact San Francisco Tax Attorney Aubrey Hone today at 415.765.1754.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

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