Tax Consequences of Theft of Customer Data


Theft of customer data is not limited to identity theft, at least the kind where the thief uses stolen identities to defraud merchants, banks and destroy credit of consumers. An important example of what can happen when customer data is stolen is the UBS case.

The history of the UBS case begins with stolen customer account data. Data in the possession of a disgruntled employee was delivered to US authorities in and a civil reward claim filed. The consequences of that data delivery are the criminal plea (actually a deferred prosecution agreement) a huge fine ($750 M USD) paid by UBS, and enormous tax consequences to UBS customers who did not disclose their foreign UBS accounts. This is they did not timely file Form TD 90-22.1 (FBAR). The obligation to file and FBAR is under the Bank Secrecy Act and is independent of obligations to timely and accurately file tax returns under the Internal Revenue Code. To date more than 14,500 Voluntary Disclosures have been filed under the Off-shore Voluntary Disclosure Program. Records of an additional 4,450 bank customers who did not take advantage of the “Amnesty” offer will be turned over as well. These 4,450 will likely face stiffer penalties and some will be prosecuted.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sanford Millar, Law Offices of Sanford I. Millar | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »


Sanford Millar
Law Offices of Sanford I. Millar

Experience and Qualifications: Over 30 years of experience in domestic and international tax... View Profile »

Follow Law Offices of Sanford I. Millar:

Reporters on Deadline

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.