• The IRS will make the requests pursuant to the double tax treaty between the U.S. and Switzerland.
• Apparently the requests will be by categories that UBS has estimated will produce about 4,450 names over a period of about a year.
• The account holder will be notified of UBS's intent to deliver the information and documents requested and will have the right to pursue relief from the Swiss authorities. Given the nature of the agreements, however, pursuing this relief might be tilting at windmills, but could slow the actual turnover down somewhat.
• The account holders will also be notified that, should they pursue this relief, U.S. law requires that they must notify the United States that they are doing so. So, provided this group follows the law, then they will self-identify themselves to the IRS.
• Finally, and most importantly, U.S. persons whose identities and information are disclosed pursuant to this process (i.e., not previously known to the IRS) still have the opportunity to join the voluntary disclosure program. Here is the pertinent part of the notice to account holders that the IRS and UBS agreed upon:
Under the terms of the voluntary disclosure initiative, as explained by the IRS in subsequent guidance, there is still an opportunity for you to make a voluntary disclosure, but that opportunity will be lost upon the provision of your account data to the IRS in response to the treaty request. Accordingly, if you are considering making a voluntary disclosure, it is important for you to do so now. The IRS has stated that a voluntary disclosure will be considered timely as soon as a taxpayer identifies himself and expresses an intent to disclose, even if the taxpayer has not yet completed amended or delinquent returns. For details and further information on this offshore voluntary disclosure practice or the more general voluntary disclosure practice, please visit the IRS website, including at: http://www.irs.gov/newsroom/article/0,,id=210027,00.html.Get in Line Brother and Sister.
Note also the links to the right of this blog to other IRS resources on the voluntary disclosure program. Readers should also note that the IRS revises the FAQs relating to the voluntary disclosure program, so it is worth checking back from time to time. The FAQs has a list of the changes made on the periodic revisions at the top of the FAQs.