WASHINGTON (CN) – More than 14,700 taxpayers reported their own foreign bank accounts to the Internal Revenue Service this year and will pay tens of millions of dollars in taxes on the previously undisclosed accounts.
The Justice Department announced the figures Tuesday, which the agency said resulted from its settlement with UBS bank of Switzerland, which earlier this year “admitted guilt on charges of conspiring to defraud the United States by impeding the IRS.”
Before the groundbreaking settlement, Americans with Swiss bank accounts enjoyed a shroud of secrecy that protected their assets from the IRS. By coming forward voluntarily, account holders avoid being reported in August, when UBS sent the IRS information on thousands of undisclosed accounts.
Faced with civil and criminal lawsuits, UBS disclosed information on some of its U.S. customers and paid $780 million in fines and penalties.
“The message to American taxpayers is clear: the era of bank secrecy and hidden assets is over,” Deputy Attorney General David Ogden said in a statement.
The Justice Department said it is investigating dozens of UBS customers, and has successfully prosecuted six.
The Justice Department added that when selecting accounts to disclose, UBS used criteria to “target the most egregious foreign account holders.”
The criteria covered “accounts of various amounts and types, including bank-only accounts, custody accounts in which securities or other investment assets were held, and offshore company nominee accounts through which an individual indirectly held beneficial ownership,” the DOJ said.
In exchange for secrecy, Swiss banks customarily charge their numbered account-holders a small fee, rather than paying interest on the accounts.