Offshore Accounts: A brave, new banking world

offshore accountsOn a summer day three years ago, a former banker walked out of a federal prison after spending two and a half years locked up for tax conspiracy. A little over a month later, the U.S. government cut him a check for $104 million (minus taxes). He was instantly transformed from unemployable convict to millionaire many times over.

Former UBS AG banker Bradley Birkenfeld blew the whistle on the Swiss bank's efforts to help American clients avoid U.S. taxes. The 50-year-old says the big check "was vindication," but that he still wants people to know that he believes he was treated unfairly by the American justice system.

NBC reports that after Birkenfeld told his story to federal officials, UBS was backed into a corner, forced to admit it had helped depositors avoid U.S. taxes and forced to pay a $780 million penalty. Last year, Switzerland's Credit Suisse was hit harder for similar offenses: its penalties totaled $2.6 billion.

The most important takeaway is not the amounts of the fines or rewards, but rather what effect all of this has had on Americans with offshore accounts. The international banking landscape has changed rapidly over the past few years, experts agree.

A tax attorney in Washington D.C. said that today, "offshore bank secrecy is essentially dead." In fact, thousands of Americans have voluntarily disclosed offshore accounts used to evade taxes, while others are still pondering their options.

Get Legal Advice About Offshore Tax Issues

At Robert J. Fedor, Esq., LLC, our attorneys are available to help you sort out your options and assist you in filing a report of Foreign Bank and Financial Accounts (FBAR), or otherwise disclose holdings or activities to the IRS and Justice Department. Our deep experience and up-to-date knowledge of the law can also be put to use in negotiations with authorities or in litigation.