As the Justice Department and the Internal Revenue Service pursue criminal and civil investigations into Swiss banking giant UBS' role in helping U.S. clients avoid taxes, many bank customers are running scared.

They are hiring tax attorneys from Tampa to Los Angeles to New York, seeking to voluntarily disclose their secret offshore accounts and face up to taxes owed -- in order to avoid criminal charges. Once the IRS is already investigating them, they can't seek such leniency.

''They want to get clean with the government,'' said Bryan C. Skarlatos, a partner at Kostelanetz & Fink in New York, who represents a few dozen UBS clients. ``They want to come in from the cold.''

The jig was up this summer. On June 30, a federal court in Fort Lauderdale authorized the IRS to serve a civil summons on UBS, demanding the names of about 19,000 U.S. clients with undeclared offshore accounts.

The Swiss have yet to comply, but on July 18, UBS announced that it would stop offering offshore banking services to U.S. clients and wind down its existing business. It began to notify many customers with accounts of less than 250,000 Swiss francs (about $206,000) that the accounts would be closed in 45 days, according to Tampa tax attorney William M. Sharp Sr., of Sharp & Associates, who represents various UBS clients.

Larger accounts don't have that deadline but still must be closed, he said. ''That puts the onus on American clients to do something,'' said Sharp, who has published several tax articles on the UBS probe.

U.S. clients have few good choices. They can send the funds offshore (a move that compounds their potential criminal exposure), get a check in the mail (creating a paper trail), or try to come clean with Uncle Sam.

The third option -- which attorneys say is the best -- involves an IRS voluntary disclosure program. It allows taxpayers, under certain circumstances, to come forward and pay their back taxes and penalties while avoiding criminal prosecution.

The IRS' voluntary disclosure program is typically available to those who have not already been contacted by the IRS and are not under criminal investigation. The hidden income must also come from a legitimate source.

''They're coming in, dribbling in. I just got one this morning,'' said Edward M. Robbins Jr., a tax attorney with Hochman, Salkin, Rettig, Toscher & Perez in Beverly Hills, Calif. About 25 UBS customers are seeking his help.

''It's the same story over and over,'' he said. ``The only difference is the amount. They're ready to come clean without going to jail.''

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@