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May 4, 2010

US Department of Justice to Seek Criminal Prosecution Against Those Using Offshore Banks to Evade Taxes

In addition to the recent case against the Swiss bank UBS, the US Department of Justice will pursue thousands of additional situations of U.S. citizens evading taxes through offshore bank accounts and when appropriate seek criminal prosecution.

According to Reuters, Kevin Downing, a senior tax attorney at the DOJ, said the U.S. expects to examine between 4,000 and 7,000 cases with both banks and governments cooperating in the probe.
Last year, UBS agreed to pay $780 million and hand over 4,450 client names to settle charges after it admitted helping U.S. clients evade U.S. tax law.

Last year, roughly 15,000 Americans with offshore accounts participated in an amnesty program that reduced penalties and avoid criminal prosecution.

There is nothing illegal about having money in offshore bank and financial accounts. However, you must report all income produced on your US tax returns and file Form TDF 90-22.1 for each calendar year by June 30th of the following year if the highest balances in all accounts during the year (when combined together) equal $10,000 or more at any time during the year. If this form is not timely filed, you can be criminally prosecuted.