Countries in Europe and Asia Agree to Modify Treaty Provisions

Profound Implications for Noncompliant U.S. Taxpayers with Foreign Accounts

WASHINGTON, March 15 /PRNewswire-USNewswire/ -- At least seven countries and
territories have announced that they will change longstanding positions on
international information exchange in tax cases, which will have profound
implications in the context of U.S. Internal Revenue Service civil and
criminal investigations. Liechtenstein, Switzerland, Luxembourg, Austria,
Andorra, Hong Kong and Singapore have indicated that bank information may be
provided in accordance with model treaty and informational exchange
agreements.

"Previously, these countries and territories would honor an information
request from the U.S. only if U.S. authorities could provide specific evidence
of serious tax offenses," said Jim Mastracchio a member of Caplin & Drysdale.

Under the modified provisions, a lower standard will apply. The respective
governing bodies will have to enact legislation and its treaties or governing
international exchange laws will require revision, but the recent
announcements start that process in motion.

With the change in policy, the release of bank account information to U.S.
authorities becomes more likely. "Now, unlike the past, any American with an
undeclared account, even if it is simply a private numbered account, is at
risk of having information disclosed and shared among a large number of taxing
jurisdictions in response to a properly framed request from the Internal
Revenue Service," said Scott Michel, also a member of Caplin & Drysdale.

Taxpayers who have foreign accounts and are not in compliance with U.S. tax
laws may want to consider the IRS Voluntary Disclosure Policy. Cono Namorato,
another member of Caplin & Drysdale, and formerly with both the I.R.S. and the
Justice Department's Tax Division, said, "The IRS will generally not seek
criminal prosecution for tax crimes if the taxpayer meets the conditions of
the IRS Voluntary Disclosure Policy." Given the broad changes in exchange
policy, taxpayers should take action to ascertain whether a voluntary
disclosure is appropriate.

About Caplin & Drysdale

A leading law firm, Caplin & Drysdale provides a full range of tax and legal
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States and around the world. The firm also offers corporate law counseling,
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SOURCE Caplin & Drysdale

Heather Maurer: +1-202-862-7857, Ufuoma Otu: +1-202-449-9804