Last week, Swiss banking giant UBS AG (UBS) reported that it will close all secret offshore accounts held by U.S. accountholders amid growing pressure from U.S. tax authorities investigating potential tax avoidance by U.S. taxpayers.  The move aids federal authorities in investigating accountholders for filing false tax returns, willful failure to disclose accounts, tax evasion and tax fraud by exposing evidence of the undisclosed accounts.  As discussed earlier this month in the Williams Mullen Tax Law Team Alert, U.S. Government Targets UBS Offshore Account Holders, federal authorities estimate that 19,000 U.S.-held UBS accounts have been used to hide $18 billion in assets - or $300 million in tax liabilities - each year. 

There are many misunderstandings among tax professionals in the private sector concerning their ethical responsibilities and how their conduct fits into the larger picture of corporate America.  First and foremost, tax professionals need to understand their ethical obligations to their clients as well as the consequences of their failure to comply.  This is especially true given the current enforcement-driven environment that exists in the United States.  With the passage of Sarbanes-Oxley, the American Jobs Creation Act of 2004 (“Jobs Act”), and now the Pension Protection Act of 2006, it is more important than ever for all tax professionals to stay involved in local bar associations and keep up-to-date on their evolving ethical responsibilities.