FOR IMMEDIATE RELEASE|
WEDNESDAY, AUGUST 19, 2009
TDD (202) 514-1888
REMARKS BY IRS COMMISSIONER DOUG SHULMAN ON UBS
Aug. 19, 2009
I am very pleased that we have successfully concluded negotiations that will result in our receiving what we wanted all along from the beginning of our investigation into UBS. We will be receiving an unprecedented amount of information on taxpayers who have evaded their tax obligation by hiding money offshore at UBS. I want to thank the Swiss Government for their cooperation in reaching an unprecedented agreement and their commitment to working with us to implement the terms of this agreement.
This is no mere keyhole into the hidden world of bank secrecy. This agreement represents a major step forward with the IRS's efforts to pierce the veil of bank secrecy and combat offshore tax evasion. It’s an historic development in our international efforts, and it helps build a solid foundation for addressing future offshore issues.
This agreement sends an unmistakable message to people hiding income and assets offshore. The IRS will vigorously pursue tax cheats around the world, no matter how remote or secret the location. And we will work with other governments where possible to obtain the information we need. Wealthy Americans who have hidden their money offshore will find themselves in a jam.
This is a sound agreement that is good for the nation’s taxpayers. The agreement puts in place an apparatus for the IRS to obtain information on thousands of offshore accounts. Further the Swiss government is prepared to work with us regarding similar U.S. requests, if any, involving other financial institutions.
For anyone with hidden offshore assets, the IRS wants to send a clear message. There is still time – although the clock is ticking - to come in and get right with the government. People with unreported offshore income should immediately contact their tax professional.
As part of this agreement, the bank will be sending notices to account holders that their information is going to be provided to the IRS. The IRS wants to highlight two important points for these bank customers:
I believe this agreement gives us what we wanted – access to information about those UBS accountholders most likely to have been involved in offshore tax evasion.
In essence, we short-circuited a protracted summons and litigation process by culling the accounts to those that were of the greatest interest to us. These are the accounts we most want to and will pursue. Working together with UBS and the Swiss Government, we established a process that all parties expect will provide the account information on an expedited basis. And we retain our right to resume summons enforcement if these efforts fail and we do not receive what the agreement outlines.
For as long as our income tax has been in place, we and other taxing jurisdictions have not been able to gain access to account information of people hiding assets and income in countries with bank secrecy laws. Between this agreement, the deferred prosecution agreement, and other sources including our voluntary disclosure program, we will gain access to more than 5,000 Swiss bank accounts at UBS alone. It is hard to pinpoint exactly how much was held in the accounts that we will get as part of this agreement, because they moved around over time. According to the bank, these accounts held over $18 billion at one point in time.
This is a huge step forward for the United States in our efforts to combat offshore tax evasion. The IRS wants to be clear on another point. International tax evasion will continue to be a top priority. This issue is not going away, and people hiding assets and income offshore will find themselves increasingly at risk due to our efforts in this area.
International enforcement is a top priority for the Treasury Secretary and me. The President has put forward a bold package of legislative proposals and increased resources for the IRS in FY 2010 budget.
Let me address the 52,000 number that has been floating in media reports. This is a number reported by UBS as all of their accounts with any U.S. connection. Many of these accounts were held by U.S. people who had complied with the law and paid their taxes. Said another way, we were never interested in pursuing 52,000 accounts and this was never an IRS number. Remember, we filed this lawsuit when the Swiss government was taking the position that we could not have access to any of these accounts. That posture changed in the past month and we were able to gain access to the accounts we wanted.
From the start of my tenure as commissioner, improving international tax compliance by large corporations and high-wealth individuals has been a priority of mine and Treasury Secretary Timothy Geithner and President Obama. We approached this in two ways. First, we need to address the abuse that has been going on for many years. And then we need to prevent abuse going forward.
This agreement does both. Thousands of taxpayers will be brought into compliance. And the deterrent effect of these cases and the other investigations that we have underway as well as our continued and vigorous focus on this going forward will help to prevent offshore noncompliance in the years ahead.
As this agreement demonstrates, the world of international taxes has dramatically changed, and people hiding assets and income offshore and from the IRS need to get right with the government now.