Foreign Account Update: UBS Financial to Release 4,450 Names by Fall 2010—Internal Revenue Service Issues Foreign Account Guidance

Two significant events impacting anyone with a UBS financial foreign account occurred in August 2010. First, the August deadline for UBS to review and identify the 4,450 U.S. account holders has passed. Second, the Internal Revenue Service ("IRS") issued comprehensive guidance regarding reporting requirements for foreign accounts that will apply to current and future reporting periods.

UBS Identifies 4,450 Names to be Disclosed

Reports indicate that, as of August 25, 2010, UBS has completed its review and is nearly ready to provide its list of account holders to the United States government. The information is expected to be provided by Fall 2010, which means that taxpayers w th undisclosed accounts may have a very narrow window of opportunity to make a last-minute voluntary disclosure before the release. Taxpayers with previously undisclosed UBS accounts should take immediate action and should consult with experienced tax counsel, but should exercise caution and carefully evaluate their specific situation because they may be disqualified from the voluntary disclosure program if their identities have already been discovered by the IRS.

IRS Issuance of "Comprehensive" Guidance

In Notice 2010-60, the IRS issued what practitioners have termed to be "comprehensive," at least with respect to many of the most basic questions raised by changes implemented in the Hiring Incentives to Restore Employment Act (the "HIRE Act"). In general, the guidance interprets rules for financial institutions to use to identify both new and existing accounts that raise disclosure issues. The guidance is broad and each financial institution and account holder is well-advised to conduct independent analysis of the impact of the HIRE Act on its respective reporting requirements.

Taxpayers with questions about these or other foreign account matters may contact Wayne D. Roberts at (616) 776-7514 or James S. Brady at (616) 776-7550.

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