US District Court authorizes IRS summons on Swiss bankFebruary 6, 2013
The US Federal District Court for the Southern District of New York has issued an order authorizing the US Internal Revenue Service (IRS) to serve a “John Doe” summons on UBS AG for the purpose of obtaining information on US taxpayers who may hold accounts at Wegelin & Co and other Swiss banks to evade US income tax.
The IRS uses a John Doe summons to obtain information about possible tax fraud by persons whose identities are unknown.
A related press release was issued by the US Department of Justice (DOJ) and the IRS on 28 January 2013.
According to the Press Release, Wegelin and two other Swiss banks used Wegelin’s US correspondent account at UBS to launder US taxpayer’s funds covertly from their undeclared accounts in Switzerland.
The IRS summons seeks records of the correspondent account at UBS to identify the US taxpayers who hold or held accounts at Wegelin or other Swiss banks.
On 3 January 2013, Wegelin entered a guilty plea before a US District Court for conspiring with US taxpayers and others to hide more than US$1.2 billion in secret Swiss accounts and to evade US taxes on the income earned in those accounts.
US federal law requires US citizens and residents to pay federal income taxes on all income earned worldwide. US citizens and residents must also report foreign financial accounts by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if the total value of the accounts exceeds US$10,000 at any time during the calendar year.
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