I'm Darrin Mish. For 32 years I've practiced federal tax litigation \u2014 routine audits, Tax Court cases, and everything in between. If you're facing an IRS issue, here's what you need to know first.<\/p>\n
The dispute between the IRS and UBS over about 52,000 wealthy American account holders of the bank may be over but there have been issues that arose since then. Firstly, the IRS has launched a six month Voluntary Disclosure program aimed at flushing out the suspected tax dodgers. The program gives each of them the opportunity to declare their assets for proper tax assessment and payment before being contacted by the IRS and facing criminal charges. Those who take advantage of the program will likely face reduced penalties. Since the launch of the program in March, there has been a spike in the number of taxpayers coming forward to turn themselves in. The amnesty program ends September 23rd.<\/p>\n
Secondly, the US government has signed agreements with several countries including Luxembourg and Switzerland to share tax information in future. This comes as the IRS is itself strengthening its ranks by seeking to employ more agents. President Obama has in his proposed budget for 2010, asked funds from Congress to hire 800 more IRS agents, examiners and lawyers to pursue suspected tax evaders who stash their cash overseas. Besides that, the President also wants legislation that makes it compulsory for international financial companies doing business in the US to reveal more financial information with the IRS.<\/p>\n
Earlier this year, UBS revealed the information<\/a> on several hundred of its clients to the IRS as part of an agreement to defer prosecution by the Justice Department. These were not part of the 52,000 other American account holders. Of this earlier batch of clients, so far four have already stepped forward to admit their guilt in tax evasion before a federal court.<\/a> To-date, after the latest agreement between the IRS and UBS over the 52,000, one of them, John McCarthy has agreed to enter a guilty plea in court to tax evasion charges. Don’t bet on the IRS not discovering more like him.<\/p>\n There have been calls among certain lawmakers for even stricter measures to recoup lost taxes from overseas countries. Senator Carl Levin, D-Mich., has proposed a bill that would instruct the Treasury secretary to maintain a list of countries that ‘impede US tax enforcement’ and gives him the authority to mete out financial penalties on countries who do not cooperate with US tax enforcement efforts. Levin’s initial list of such countries includes Switzerland, the Cayman Islands, Bermuda, the Bahamas, Hong Kong and Panama.<\/p>\n