Why is the IRS Sitting on its Hands?

  • Home
  • News
  • Why is the IRS Sitting on its Hands?
Tax Returns with Portfolio, IRS form 1040 and Cash

Why is the IRS Sitting on its Hands?

It has been more than three years since UBS whistleblower extraordinaire Bradley Birkenfeld approached the DOJ, IRS, and SEC with information about potential tax evasion by U.S. clients facilitated by UBS AG. Since then, the IRS appears to have been sitting on its haunches and not making the most effective use of the information Birkenfeld provided. Whistleblower booster Senator Chuck Grassley (R-Iowa) has contacted the IRS, demanding an accounting of what, exactly, the agency has done with the seemingly incredible gift Birkenfeld gave it. Keep in mind that the only reward Birkenfeld has received so far for coming forward is jail time.

The main reason for Senator Grassley’s concerns is that the Swiss Parliament this week rejected a deal made with the U.S. last August to hand over banking information on more than 4,000 wealthy American UBS clients suspected of tax evasion. In his letter to the IRS, Senator Grassley argues that the agency should not be sitting around waiting for treaties to be ratified. The agency has the information in its hands now, and Senator Grassley is concerned that it is wasting time while the Swiss government unravels its agreements with the DOJ. (Banking secrecy has until recently been ironclad in Switzerland, so the parliament may be rattling its legislative sabers a bit in an effort to shore up the nation’s reputation).

If the entire Swiss parliament does not approve the deal with DOJ by June 18th, things could get really ugly for UBS. DOJ could revive a lawsuit to turn over 52,00 names (way, way beyond the 4,450 stipulated in the original agreement). If UBS failed to turn over the 52,000 names, it could end up facing fines amounting to millions of dollars per day of refusal. Furthermore, if UBS fails to turn over any of these names, it could face indictment.

Either way, the skies look rather stormy for UBS right now. This still doesn’t explain why the IRS is not taking advantage of the leads Birkenfeld provided. Perhaps Senator Grassley’s letter will be enough to get a few accountants’ motors running!

*    *    *    *    *
Young Law Group is a nationwide leader in whistleblower representation and has successfully represented numerous clients in some of the nation’s largest qui tam cases for over a decade.  For a free confidential consultation, please call Eric L. Young, Esquire at (800) 590-4116 or complete our online form.