April 11, 2009 – 10:26 pm
Steven Michael Rubinstein, a certified public accountant, has the dubious distinction of being the first client indicted as a result of the massive IRS effort to end the aiding of tax evasion by Swiss banking giant UBS. The principals of www.RewardTax.com have previously blogged on multiple occasions about the UBS investigation, which was started because of a tax whistleblower’s reporting of tax fraud and conspiracy by the bank. The whistleblower is a former bank employee that was apparently enticed into spilling the goods on UBS by the December 2006 enactment of the Tax Whistleblower Reward Program.
Besides triggering the potential collection of billions of dollars of U.S. tax and penalties, which otherwise would have avoided the IRS’ radar screen; the UBS case has another very positive answer for professionals—the case appears to have made it through the Tax Whistleblower Reward Program in approximately 2 years. This is much better than the 7-year average that plagued whistleblower cases prior to the enactment of IRC section 7623. UBS has agreed to pay $780 million in fines, penalties, and restitution. Presumably, the whistleblower will be entitled to a reward equal to at least 15% of $780 million.
Although Rubinstein may be the first, he certainly will not be the last. Court records suggest that the IRS will receive thousands of names of cheating Americans who have committed tax fraud by having secret Swiss bank accounts–the proceeds of which were hidden to avoid U.S. taxation. According to the criminal complaint, Rubinstein failed to disclose that he had an interest in, or signatory authority over UBS Swiss bank accounts.