New York (HedgeCo.Net) – Wealthy Americans who have been hoarding cash overseas and failing to pay Uncle Sam are getting a break, as the Internal Revenue Service unveils a plan that will greatly reduce their penalties.

The idea comes a month after UBS was charged with helping thousands of American clients hide over $15 billion in secret Swiss bank accounts.  The IRS is forcing the bank to disclose the names associated with 52,000 offshore accounts, something that UBS is trying desperately to contest in order to salvage their U.S. clientele base.  

Should these individuals come forward prior to this release of names, the IRS is offering a reduced penalty of up to 20 percent for not filing a Report of Foreign Bank and Financial Accounts, also known as an Fbar.   However, the clients must be proactive.  Should they not come forward and their names eventually be disclosed, they not only face a penalty equal to 50 percent of the balance of each account, but other fines and possible jail time as well.  

"This is a chance for people to come clean on their own," IRS Commissioner Doug Shulman explained.

The IRS will still require the individuals to pay any back taxes owed over the last six years as well as any applicable fees.  It is estimated that the U.S. loses $100 billion a year in lost tax revenue from offshore activity.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: accredited-investors, american clients, applicable fees, back taxes, clientele base, financial-accounts, hedgeco, internal revenue service, irs commissioner, jail-time, offshore accounts, offshore activity, salvage, shulman, sister-sites, swiss bank accounts, ubs, uncle sam

HorseRaceInsider.com – Richard Shapiro, former chairman of the Califorinia Horse Racing Board, has been "devastated" financially by the $50-billion Ponzi scheme that was engineered by Bernard Madoff, according to a letter that Shapiro wrote to a U.S. Congressman.

"Nearly all of my life’s work, savings and pension evaporated on December 11, leaving me in desperate financial straits," Shapiro said in the letter to Brad Sherman, a Democrat who represents the San Fernando Valley, an area where Shapiro lives. The letter was dated January 12.

In the letter, Shapiro asked Sherman to pursue Congressional relief that might help him and other victims of Madoff, who has confessed to defrauding dozens of clients from his company’s New York offices. One of Shapiro’s proposals is to allow Madoff victims to claim credit for back taxes that they paid on paper profits that didn’t really exist.

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Tags: back taxes, bernard madoff, brad sherman, congressman, democrat, dozens, horse racing, paper profits, ponzi scheme, proposals, richard shapiro, san fernando valley