Reuters has reported that the IRS is set to serve summonses on foreign banks to obtain the names of U.S. citizens who may have committed tax fraud and buried the proceeds in Swiss or other offshore bank accounts. As I have previously blogged, the IRS is already involved in tax litigation with UBS seeking the names of 52,000 holders of Swiss bank accounts.
The Reuters revelation is not good news for those with offshore bank accounts who were hoping to keep them secret from the IRS. Even taxpayers who have reported all of the income that was used to fund the offshore accounts are at risk for a 50% FBAR penalty.
We are now reviewing with some of our clients the advisability of taking advantage of the IRS tax amnesty that is available until September 22nd.