IRS Probes Singapore Asset Manager for accepting transfers from undeclared Swiss accounts
First came Switzerland. Now the Internal Revenue Service has a new target: Singapore
Criminal investigators at the IRS are probing whether a Singapore asset-management firm accepted transfers from undeclared Swiss accounts closed by U.S. taxpayers, according to lawyers familiar with the matter.
The investigation marks an expansion of the U.S. crackdown on undeclared offshore accounts that began in Switzerland in 2009, the lawyers said. Since then, U.S. officials have pursued banks and individual “enablers,” such as lawyers or asset managers, that have helped U.S. taxpayers hide money abroad in Switzerland, Liechtenstein, Israel, India and the Caribbean. Until now, there was little indication they had widened their probe to Southeast Asia or Hong Kong.
“The IRS and Justice Department seem be turning their focus east, where there are many U.S. taxpayers with accounts—so it could be fertile ground,” said Bryan Skarlatos, a lawyer with Kostelanetz & Fink in New York, which has represented nearly 2,000 taxpayers with undeclared offshore accounts.
The lawyers declined to name the firm being probed but said a handful of clients were being questioned about the asset manager.
Scott Michel, a lawyer with Caplin & Drysdale in Washington, which has extensive experience in offshore-account issues, said the Singapore government may be more willing to cooperate with U.S. officials about unreported accounts than some other countries.
“They are on board” with American and other initiatives to open up reporting by foreign financial firms, he said.
A spokesman for the IRS declined to comment.
U.S. officials have publicly vowed to track down “leavers”— people who closed offshore accounts, especially in Switzerland, and moved the assets to avoid detection after the crackdown began in 2009. Such a transfer is often clear evidence of criminal intent to evade taxes, said Mr. Michel.
Currently, more than 100 banks and other financial firms in Switzerland are providing U.S. officials with details about asset transfers from closed accounts. The banks are required to turn over this information, a senior Justice Department lawyer said at a June conference, as part of a limited-amnesty program in which firms detail past complicity with U.S. tax evasion and pay penalties in return for assurances they won’t be prosecuted.
Experts said the Swiss bank program also is providing U.S. officials with large amounts of other account data they will likely mine for future audits.
Since the U.S. crackdown on offshore-account tax evasion began in 2009, more than 50,000 people have entered a special IRS limited-amnesty program for individuals with offshore accounts.
They have paid more than $7 billion to resolve their cases, according to the IRS. Banks in Switzerland and elsewhere have paid more than $4 billion to resolve their cases, with more to come.