Offshore Accounts: No Place to Hide?

The U.S.’s intense crackdown on tax evasion is entering a new phase.

LAURA SAUNDERS, WSJ.com

 

Stephen Webster

What a difference a few years can make.

For decades U.S. tax authorities did little to enforce laws on offshore accounts. Some people felt free to hide assets abroad in a web of secret accounts, and many U.S. citizens living abroad didn’t bother to file returns with Uncle Sam as long as they paid local taxes.

All that changed in 2009, when U.S. officials began an intense campaign against undeclared accounts after UBS AG UBSN.VX -0.82% admitted that it helped U.S. taxpayers hide money abroad. The Swiss bank paid $780 million and turned over more than 4,000 names to avoid criminal charges.

Now, international tax lawyers like Henry Christensen are telling clients with offshore accounts that “tax havens where people can hide money are a thing of the past.” Mr. Christensen, of McDermott, Will & Emery in New York, represents many wealthy multinational families. “Forget about confidentiality,” he says he and his peers are telling clients. “Transparency is here to stay.”

The crackdown has brought momentous changes. Among other things, the once-impenetrable veil of Swiss bank secrecy is in tatters, following an agreement in late August between the U.S. and Switzerland that will cause dozens of Swiss banks to pay penalties and name names to atone for past misdeeds. READ MORE