romised to back off of the demand of obtaining information about the remaining 42,000 accounts that were allegedly involved in illegal tax evasion activity.
This settlement came following a case that was filed in the Southern Florida District court in America where the U.S government accused the United Bank Switzerland of aiding American citizens in illegal tax frauds. This case was filed by The Internal Revenue Service that claimed that UBS was helping its clients, an alleged 52,000 American citizens to escape from having to pay duly owed tax revenue to the IRS.
This tax evasion probe let to a whirlwind case that was followed closely by a large number of people all over the world and brought to light the murky world of off-shore banking which has long been rumored to be a business which lets wealthy and the ultra-rich stash off their money in unknown overseas locations where they are virtually untraceable by tax-collectors and other government agencies.
According to the United States law, a taxpayer who has a foreign account with more than $10,000 must file a Foreign Bank & Financial Account Report (FBAR) with the treasury by the 30th of June annually.(Gary S. Wolf Law Offices, 2009).These FBAR rules were established in 1970 as a part of the Bank Secrecy Act and since 2003, the Internal Revenue Service has been enforcing these laws. The IRS – a part of the Department of Treasury- received 322,000 FBAR’s in the year of 2007 and it still estimated that there were nearly 1 million overseas accounts held by American citizens out of which nearly 700,000 were undisclosed.
The criminal penalties that can be issued for an undeclared foreign account and/or unreported income can be up to 24 years in jail. Filing false income tax returns and committing perjury in this case can result in a count of 1 felony and 3 misdemeanors against a person and can result in up to 14 years in jail and willful non-disclosure of a foreign account worth more than $10,000 can result in