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UBS Client Pleads Guilty to Filing False Tax Return


A UBS client pleaded guilty today to filing a false tax return for tax year 2004, the Justice Department and Internal Revenue Service (IRS) announced.  On April 1, 2009, the taxpayer, an accountant, was charged with filing a false tax return that intentionally failed to disclose the existence of a Swiss bank account maintained by UBS of which he was the beneficial owner and failed to report any income earned on that account.

The taxpayer had maintained a UBS bank account in the name of a nominee British Virgin Island corporation.  His tax return failed to report that he had an interest in, or signature authority over, a financial account at UBS in Switzerland.  Additionally, he failed to report the income he earned on any UBS Swiss bank accounts.

As part of his plea agreement, the taxpayer agreed to pay a 50% penalty for the year with the highest balance in the account as of June 30 in order to resolve his civil liability for failing to file FBARs for tax years 2001 through 2007.

The I.R.S. currently has a voluntary disclosure program in which taxpayers can file the prior 6 years of tax returns to declare unreported offshore accounts and unreported offshore entities.  Under the voluntary disclosure program, taxpayers generally must pay all taxes and interest on unreported income.  Further, certain penalties are imposed, including a penalty equal to 20% of the highest value in the foreign financial accounts during the past 6 years.

Andrew Mitchel is an international tax attorney who advises businesses and individuals with cross-border activities.

Tags: Other - Tax Fraud