Many US Tax Evaders Are Not Sleeping Easy Tonight

Swiss wealth management company UBS announced late last week that they will be closing 19,000 offshore accounts that belong to rich US clients.

This comes as a result of an ongoing, high-profile investigation by US authorities that resulted in the indictment of UBS's wealth management chief. According to various published reports, UBS will also be paying a reported $1.8 billion dollar fine for helping to hide more than $18 billion dollars of untaxed US money.

Representatives of the IRS warned people in 2008 that they should voluntarily turn themselves in to avoid stiffer punishment. Many people have taken them up on this offer in the hopes of avoiding jail time.

Those who haven't turned themselves in will face a very tough decision.

Representatives from UBS have said that the company will either be transferring the assets in the closed accounts to other banks or divisions within UBS, or mailing checks directly to clients.

In either case, this will create a paper trail that will easily allow the IRS to identify the rightful owners of the funds.

If you had a couple million locked away in a UBS account, would you:

1. Attempt to transfer the funds to another bank

2. Request a check, deposit it and hope you somehow go unnoticed?

3. Request a check, and throw it into the garbage

If you choose option 1, then you will very likely still get busted by US authorities.

If you choose option 2, then you will certainly get busted by the authorities.

If you choose option 3, then you will be saying goodbye to millions of dollars in the hopes of avoiding prosecution. I am quite sure that UBS has turned over full details of who owns the 19,000 closed accounts to the IRS, so even in this scenario, you will very likely still get busted.

The people who voluntarily turned themselves in to the IRS are looking pretty smart at this point. They will surely have to pay heavy penalties and back taxes, but they will likely avoid any jail time.

The days of hiding money in Switzerland appear to be over, at least for American citizens.

Filed under: General Knowledge