Showing that the fight against secret offshore bank accounts is truly global, the Department of Justice and the Internal Revenue Service are trying to force a Singapore bank to disclose its information about an account held by a U.S. citizen residing in China.
In the case of United States v. UBS AG, filed in the Southern District of Florida, the Justice Department is seeking to compel a summons, forcing UBS’s branch in Miami to produce bank records of a UBS Singapore account owned by a U.S. taxpayer who lives in China and is under IRS audit. It signals a continued effort by the U.S. tax authorities to crack down on the offshore tax evasion. After eight years of aggressive U.S. enforcement against Swiss banks, the IRS and the DOJ now set their focus on the pursuit of the money transferred out of Switzerland, particularly into Singapore and other Asian banks.
In this particular case, in light of the fact that the taxpayer lives in China, the IRS cannot serve a summons directly on him, and because the U.S. and Singapore have no tax treaty, the government issued a summons, demanding that the Miami branch of UBS retrieve from Singapore the sought-after bank statements, irrespective of Singapore bank secrecy laws.
In recent comments to the Federal Bar Association, Caroline Ciraolo, Acting Assistant Attorney General in charge of the DOJ Tax Division said: l”No jurisdiction is off limits, our investigations of both individuals and entities are well beyond Switzerland at this point.”
U.S. taxpayers with foreign bank accounts should be mindful of the IRS and DOJ continued efforts to obtain information from foreign banks. With several offshore voluntary disclosure options still available, those taxpayers who have not complied with U.S. tax reporting requirements, should consult with an experienced tax attorney to determine the best strategy.