UBS is handing over records on an American client's account in Singapore as U.S. authorities seek to move beyond Switzerland in their fight against offshore tax evasion.
The case involves Ching-Ye «Henry» Hsiaw, a U.S. citizen living in China who had an account in Singapore from 2001 to 2011, as finews.asia reported earlier. After reaching an agreement, the bank handed over records on May 31 and June 10, the Justice Department said Tuesday in a court filing dismissing the petition, news agencies «Reuters» and «Bloomberg» report.
«The Department of Justice and the Internal Revenue Service (IRS) are committed to making sure that offshore tax evasion is detected and dealt with appropriately,» Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division said in a statement Wednesday.
Voluntarily Dismissed
UBS has now complied with an IRS summons for bank records held in its Singapore office, the Justice Department announced. Because UBS has now produced all Singapore-based records responsive to the request and the IRS determined that UBS complied with the summons, the Justice Department has voluntarily dismissed its summons enforcement action against the bank.
The IRS served an administrative summons on UBS for records pertaining to accounts held by Hsiaw. According to the petition, the IRS needed the records in order to determine Hsiaw’s federal income tax liabilities for the years 2006 through 2011.
Dealing Appropriately
According to earlier reports Hsiaw transferred funds from a Switzerland-based account with UBS to the UBS Singapore branch in 2002, according to the declaration of a revenue agent filed at the same time as the petition. UBS refused to produce the records, and the United States filed its petition to enforce the summons.
«The Department of Justice and the IRS are committed to making sure that offshore tax evasion is detected and dealt with appropriately,» said Ciraolo of the Tax Division.
Only One of the Tools
«One critical component of that effort is making sure that the IRS has all of the information it needs to audit taxpayers with offshore assets. In this case, we filed a petition to enforce a summons for offshore documents, but that’s only one of the tools we have available for gathering information. Taxpayers with offshore assets who underreported their income should come forward before we come looking for them,», Ciraolo said.
The U.S. has focused largely on Switzerland since 2008 as it has fought offshore tax evasion. More than 80 Swiss banks, including UBS and Credit Suisse, have agreed to pay a total of $5 billion (S$6.7 billion) or so in penalties and fines.
Who's Next?
The question remains where the IRS and the Justice Department will turn next as they sift through a trove of data gathered from Swiss banks and from more than 50,000 U.S. taxpayers who disclosed their accounts to avoid prosecution.
