Offshore Bank Accounts with UBS Being Closed

The United States Internal Revenue Service (IRS) has been investigating offshore banks for quite sometime with regard to whether or not they are helping tax evaders. (HBSC is one of the banks being investigated right now.) The famous Swiss bank, UBS, has been working on closing accounts held by Americans since last year as a result of tax evasion charges. However, it is only recently that efforts have been stepped up to close offshore bank accounts held by Americans. Reuters reports on the efforts to get rid of these accounts:

UBS spokesman Serge Steiner said the decision to close offshore accounts for U.S. domiciled clients was taken in November 2007. The bank started last year to close cash accounts of U.S. clients holding less than 50,000 Swiss francs ($45,660), he added.

“This is an ongoing process. It started last year and accelerated since last summer,” Steiner said, confirming a New York Times report. As part of the investigation, U.S. authorities indicted UBS’s wealth management chief last year.

Those with offshore bank accounts in UBS can transfer the money elsewhere, or receive a check. However, there are warnings that those who receive a check are leaving a paper trail. On the other hand, though, there are reports of account holders turning themselves over to the IRS. The word is that those who voluntarily admit to using offshore banking for tax evasion will be treated less harshly than those who are tracked down.

In any case, it will be interesting to see how this plays out. And, of course, the current events speak volumes about the importance of understanding the tax laws in your own country before you open an offshore account.