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IRS Drops Action Against UBS; IRS Considering 2nd Amnesty

The IRS has decided not to pursue its legal action against Swiss banking giant UBS, in which it hoped to force the bank to give it the names of Americans suspected of holding offshore bank accounts for purposes of tax evasion.

A month ago the U.S. Department of Justice dropped criminal charges against UBS after completion of a deal in which UBS agreed to stop selling accounts that were more or less openly available for purposes of evading U.S. taxes.

IRS Commissioner Douglas H. Shulman says the Service will be looking at other offshore banks suspected of offering offshore tax evasion services.

Shulman says the IRS still expects to receive information on 7,500 American UBS account holders. In addition, more than 15,000 Americans with hidden accounts have come forward during a voluntary disclosure period that ended in October 2009.

Even since the end of the voluntary disclosure period, three thousand more taxpayers with foreign accounts have come forward. Since the voluntary disclosures are reaching 20,000, and only 7,500 are known to be account holders at UBS, it is apparent that many other banks are involved in similar activities.

Shulman says the IRS is considering a second amnesty period. The deal will not be as good as during the first period, though, since new volunteers did not come forward before. Immunity from prosecution and reduced penalties may not be offered in a second amnesty period.

Source: New York Times "U.S. Ends Inquiry of UBS Over Offshore Tax Evasion" 11/16/2010

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