One of the oldest tax dodges around -- the Swiss bank account -- may be in trouble, as a Miami federal judge has issued a court order authorizing the IRS to demand information about U.S. citizens suspected of depositing money in Swiss bank accounts in order to evade federal income tax.

By allowing the IRS to serve Zurich, Switzerland-based UBS AG with a "John Doe" summons, U.S. District Court Judge Joan A. Lenard enabled the IRS to request information on possible tax fraud violators whose identities are unknown. The summons will require UBS to produce records identifying U.S. taxpayers with accounts at UBS in Switzerland who elected to have their accounts remain hidden from the IRS.

According to a court statement by a former UBS banker, the Swiss bank holds about $20 billion in "undeclared" accounts for U.S. taxpayers.

Under the law, all U.S. taxpayers are required to report to the IRS all financial accounts in a foreign country if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willfully failing to report such funds can result in a penalty of up to 50 percent of the amount in the account at the time of the violation.

Also See:
Tax Gap of Unpaid Taxes Runs $350 Billion a Year
IRS Draws Up Plans to Address the Tax Gap
Who Pays the Most Income Tax?

In an ironic twist, scammers promoting bogus and costly sweepstakes scams are posing as officials of the Federal Trade Commission -- the very federal agency that is chasing them down.

Claiming to represent "the national consumer protection agency," the non-existent "National Sweepstakes Bureau," and even the Federal Trade Commission (FTC), the high-tech scammers use names of government agencies and legitimate phone numbers that mask their actual locations.

The scam itself, warns the FTC is one of the oldest sweepstakes traps around. The cons convince the victim to send in money to claim a sweepstakes "prize" they've supposedly won. The tricked victims send the money to collect their "winnings" which, of course, never existed.

In an FTC Consumer Alert, agents warn consumers that legitimate sweepstakes organizers never require winners to pay anything, including "insurance," "taxes" or "shipping and handling charges" to collect the prizes. "If you have to pay to collect your winnings, you haven't won anything," warns the FTC.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).

Also See:
FTC Offers Advice on Dealing With Rising Gas Prices (2004)
FTC Warns of Envelope Stuffing Schemes
FTC Cracks Down On "Free" Grant Company