Hodgen. Law PC - International Tax. Some people who had UBS accounts entered the voluntary disclosure program. Shulman Commissioner of Internal Revenue Internal Revenue Service 1. Constitution Avenue, NW Room 3. Washington, DC 2. John Di. Cicco, Esq. Acting Assistant Attorney General Department of Justice Tax Division 9. UBS AG Credit Suisse AG, Credit Suisse Fides and Clariden Leu Ltd. Liechtensteinische Landesbank AG Zurcher Kantonalbank. Current Voluntary Disclosure Program Administrator at Colorado Department of Revenue, Tax Manager at Colorado Department of Revenue Past Tax examiner at Colorado Department of Revenue, Marketing Coordinator at Nas Group of Companies Education The. Despite Swiss court ruling and end of amnesty, voluntary disclosure still has advantages. Earlier this month a Swiss court ruled that parts of a deal the Swiss government reached to hand over the names of 4,450 U.S. New Jersey Voluntary Disclosure Program. New Jersey’s Voluntary Disclosure Program is a means for Individual and Business Taxpayers who realize that they have a tax filing obligation or that their business activity creates nexus for New Jersey state tax. Pennsylvania Avenue NW Room 4. Washington, DC 2. To view the IRS Press Release, please visit http:// To view the original bulletin on the Voluntary Disclosure Program. The DOJ responded that it was not part of the IRS's whistleblower program and that it would not grant Birkenfeld immunity. Like Renzo, Lack advised his American clients not to cooperate with U.S. Gentlemen: The undersigned are private practitioners who specialize in criminal tax matters. Many of us have served in senior tax enforcement positions in the Internal Revenue Service and the Department of Justice. We have all spent our careers in the public and private sectors advancing tax compliance and good tax enforcement policy, and we have always believed that a core component of the IRS compliance mission is its Voluntary Disclosure Policy (“VDP”). The decades old VDP embodies a determination that our tax system benefits from having a mechanism for non- compliant individuals to come forward and avoid criminal prosecution by disclosing their prior misconduct. We write as a group to address a development that could jeopardize the VDP at the height of its visibility and success, as it recently brought thousands of American taxpayers into compliance and likely billions of dollars in assets into the tax system. Our immediate concern is the prospect that the government may bring criminal tax charges against persons who attempted voluntary disclosures but were later advised that pursuant to the VDP they were not timely.
Such action would effectively destroy the VDP. The individuals involved in these cases started the process of making a voluntary disclosure at various times, some in 2. But irrespective of when or how they began, such persons did come forward in the utmost good faith and make a full and complete disclosure to the IRS of their foreign accounts. Indeed, in official statements and public presentations during 2. Commissioner of Internal Revenue and other IRS and Justice Department officials explicitly encouraged them to do so. Yet, the government now may decide that based on a literal reading of the VDP these persons were too late in coming forward and should be prosecuted. We understand that the VDP is an act of administrative grace by the IRS, creating no enforceable rights. We also understand that there are different cases with distinct facts. However, in our view, prosecuting persons who came forward in good faith during the fast moving events of late 2. It would undercut the credibility of the Commissioner and his office. It would be public fodder for press stories, articles and panel discussions for years. In a practical sense, it would also change what we tell our clients. To a very large extent, we are the gatekeepers of the VDP. Clients come to us with a high level of distrust of the IRS. We routinely explain that because the IRS wants to encourage voluntary disclosures, it has treated those who come forward with fairness. Indeed, the undersigned had such conversations with thousands of clients last year, leading nearly all of them into the IRS settlement initiative. If the government now prosecutes persons who attempted good faith disclosures, we, and any other practitioner in this business, will necessarily have to change the risk assessment we provide to our clients. They will not care about the technical nuances of why certain taxpayers who attempted disclosures were prosecuted and others were not. Disclosures will likely grind to a halt. The highly charged and uniquely visible developments in the offshore account area have put enormous pressure on the interpretation and application of the VDP. We believe that if the government moves forward in these cases, the VDP will for all practical purposes become irrelevant. Surely the government has enough ongoing offshore account criminal investigations that do not involve attempted voluntary disclosures to achieve its enforcement objectives without eviscerating a vital component of the IRS’s compliance mission at the very peak of its extraordinary recent success. We respectfully urge the relevant decision makers to consider these views in deciding whether to recommend prosecution in cases where good faith disclosures have been attempted. Indeed, some of the signatories to this letter have clients directly implicated in this issue, and we believe that referrals in some of these cases are being reviewed at this time, with a rapid decision requested by the line attorneys. We would therefore appreciate your prompt attention to this matter. Mundaca, Assistant Secretary of Tax Policy, U. S. Department of the Treasury. The Honorable William J. Wilkins, Chief Counsel, Internal Revenue Service. Steven T. Miller, Deputy Commissioner of Internal Revenue, Internal Revenue Service. Victor Song, Chief, Criminal Investigation Division, Internal Revenue Service. Rick Raven, Deputy Chief, Criminal Investigation Division, Internal Revenue Service. Karen L. Hawkins, Director, Office of Professional Responsibility, Internal Revenue Service. Edward F. Cronin, Associate Chief Counsel Criminal Tax, Internal Revenue Service. Nina E. Olson, National Taxpayer Advocate, Internal Revenue Service. Ronald A. Cimino, Acting Deputy Assistant Attorney General, U. Department of Justice, Tax Division. Bruce M. Salad, Acting Deputy Assistant Attorney General, U. S. Department of Justice, Tax Division (for certain matters)Signators: Stuart E. Abrams Frankel & Abrams Assistant U. S. Attorney, Southern District of New York, 1. Chief of Major Crimes Unit, 1. Associate Independent Counsel (Iran- Contra), 1. Chair, ABA Section of Taxation, Committee on Civil and Criminal Tax Penalties, 2. James A. Bruton III Williams & Connolly Acting Assistant Attorney General, Department of Justice, Tax Division, 1. Principal Deputy Assistant Attorney General, Department of Justice, 1. Larry A. Campagna Chamberlain, Hrdlicka, White, Williams & Martin Vice- Chair, ABA Section of Taxation Committee on Civil and Criminal Tax Penalties, 2. Caroline D. Ciraolo Rosenberg Martin Greenberg, LLP Chair, Taxation Section, Maryland State Bar Association, 2. John M. Colvin Chicoine & Hallett. Michael C. Durney Law Offices of Michael C. Durney Acting Assistant Attorney General, Department of Justice, Tax Division, 1. Principal Deputy Assistant Attorney General, Department of Justice, 1. Gerald A. Feffer Assistant United States Attorney, Southern District of New York, 1. Deputy Assistant Attorney General, Department of Justice, Tax Division, 1. Lawrence S. Feld Law Office of Lawrence S. Feld Assistant United States Attorney, Southern District of New York, 1. Robert S. Fink Kostelanetz & Fink LLP Chair, ABA Section of Taxation Committee on Civil and Criminal Tax Penalties, 1. Miriam Fisher Morgan, Lewis & Bockius, LLP Special Assistant to the Assistant Attorney General, Tax Division, Department of Justice, 1. Nathan J. Hochman Bingham Mc. Cutchen LLP Assistant Attorney General, U. S. Department of Justice, Tax Division, 2. Lawrence S. Horn Sills Cummis & Gross P. C. Assistant United States Attorney, District of New Jersey, 1. Paula M. Junghans Zuckerman, Spaeder LLP Acting Assistant Attorney General, Department of Justice, Tax Division 1. Deputy Assistant Attorney General, Department of Justice, Tax Division, 1. Barbara Kaplan Greenberg Traurig, LLP Senior Trial Attorney, Internal Revenue Service, 1. Kathryn Keneally Fulbright & Jaworski L. L. P. Council Director, ABA Section of Taxation, 2. Chair, ABA Section of Taxation, Standards of Practice Committee, 2. Chair, ABA Section of Taxation, Committee on Civil and Criminal Tax Penalties, 2. Mark E. Matthews Morgan, Lewis & Bockius, LLP Deputy Commissioner, Services/Enforcement, Internal Revenue Service, 2. Chief, Criminal Investigation Division, Internal Revenue Service, 2. Deputy Assistant Attorney General, Department of Justice, Tax Division 1. Robert E. Mc. Kenzie Arnstein & Lehr LLP Council Director, ABA Section of Taxation, 1. Scott D. Michel Caplin & Drysdale, Chartered Chair, ABA Section of Taxation, Standards of Practice Committee, 2. Chair, ABA Section of Taxation, Committee on Civil and Criminal Tax Penalties, 1. Cono R. Namorato Caplin & Drysdale, Chartered Director, Office of Professional Responsibility, Internal Revenue Service, 2. Deputy Assistant Attorney General, Department of Justice, Tax Division, 1. Chief, Criminal Section, Department of Justice, Tax Division, 1. Special Agent, Internal Revenue Service, Intelligence (now Criminal Investigation) Division, 1. Former Chair, Subcommittee on Criminal Tax Policy, ABA Section of Taxation, Committee on Civil and Criminal Tax Penalties. Roger M. Olsen Assistant Attorney General, Department of Justice, Tax Division, 1. Deputy Assistant Attorney General, Department of Justice, Tax Division, 1. Kathleen Pakenham White & Case LLPCharles P. Rettig Hochman, Salkin, Rettig, Toscher & Perez, P. C. Chair, Committee on Civil & Criminal Tax Penalties, ABA Tax Section, 2. Edward M. Hochman, Salkin, Rettig, Toscher & Perez, P. C Central District of California — Assistant United States Attorney, 1. Tax Division, Chief, 1. Assistant Chief, 1. Richard J. Sapinski Sills Cummis & Gross, P. C. Special Trial Attorney, Internal Revenue Service, 1. Bryan C. Skarlatos Kostelanetz & Fink LLP Chair, ABA Section of Taxation, Committee on Civil and Criminal Tax Penalties, 2. William E. Taggart & Hawkins Dean Emeritus Golden Gate University School of Law. Justin A. Thornton Law Offices of Justin Thornton Senior Trial Attorney, Department of Justice, Tax Division, 1. Steven Toscher Hochman, Salkin, Rettig, Toscher & Perez, P. C. Internal Revenue Agent, 1. Trial Attorney, Department of Justice, Tax Division, 1. Josh O. Ungerman Meadows, Collier, Reed, Cousins, Crough & Ungerman L. L. P. IRS District Counsel Senior Attorney, 2. Special Assistant U. S. Attorney, Northern District of Texas, 2. M. Todd Welty Sonnenschein Nath & Rosenthal LLPBruce Zagaris Berliner Corcoran & Rowe L. The UBS scandal: voluntary disclosure. Unless you have stopped reading newspapers, watching television or listening to the radio then it is more than likely that you have heard something about the UBS scandal. The US government and specifically, the Internal Revenue Service (IRS) and the Justice Department (Justice) have attacked Swiss Banking secrecy. The Americans targeted US account holders at UBS. The US claimed that UBS had helped set up accounts for Americans that were either used for tax fraud or other nefarious purposes. By late 2. 00. 8, the US had threatened UBS with the filing of 5. John Doe summons unless UBS was prepared to hand over the names of US account holders that it suspected were evading the payment of tax. Initially, UBS resisted but it crumbled quickly under pressure from the Swiss government and a global move to more transparency in international tax matters. By February 2. 00. UBS agreed to pay a hefty fine in the amount of $7. USD in order to avoid criminal prosecution and it further agreed to hand over the names of some 2. U. S. The US government was not satisfied and it continued to press both the Swiss government and UBS for more account information. Finally, in late 2. UBS agreed to hand over the names of some 4,4. In turn, the US agreed to drop the summons. The UBS situation is just the tip of the iceberg. The US government is targeting 1. Swiss banks. Already, five people have been found guilty of tax evasion and /or fraud and are heading to jail. Miller Thomson Analysis. The information garnered by the Americans from the UBS scandal will be shared with foreign governments. The Canada Revenue Agency (CRA) does not want to be left behind in this new global reality of governmental activity designed to reduce or at least curb tax evasion. It has been receiving information from the Americans. It is only a matter of time before the CRA identifies any accounts of interest. Little time remains before the individual and the account are exposed. One avenue remains open to the taxpayer in Canada. It is the Voluntary Disclosure Programme (VDP). The CRA 's administrative policy is not to levy criminal or civil penalties on a taxpayer who voluntarily discloses incorrect tax filings. The Voluntary Disclosure cannot only prevent a tax prosecution but financial penalties can be avoided and partial interest relief may be granted. The CRA has established a set of criteria for a disclosure to be valid under the VDP. It must be voluntary; the information must be complete; it must involve the application of a penalty and it must contain information that is at least one year past due or incorrect information from a previously filed tax return. There are further limitations to the taxpayer for the availability of the VDP. A disclosure would not be considered voluntary and consequently not acceptable if the taxpayer was aware of an audit, investigation or some other enforcement action carried out by the CRA. The definition of enforcement action is very broad. In fact, it is so wide that it includes such things as requests for tax instalments and even inquiries by other authorities such as the securities commissioner or police. While disclosures can be made on a no name basis, the simple fact is that you cannot fully conclude the process without eventually disclosing the taxpayer's identity. The legislative authority for the program is found in section 2. Income tax Act. It is completely discretionary. Where the Minister denies relief, a taxpayer can request a second level review. This review takes place within the CRA and it presumed to be performed by an independent CRA officer. If upon a second level review the Minister denies the taxpayer's relief, a judicial review of the exercise of the Minister's discretion is available to the taxpayer under section 1. Federal Courts Act. If you know of a client that has an overseas account then there is no time to lose. You should encourage them to contact us and protect their interest as soon as possible.
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