by Barry C Picker, CPA/PFS, CFP
Chutzpah has been defined as the child who kills his parents and then pleads for mercy in Court because he’s an orphan.
In a similar vein are the three plaintiffs who sued UBS for the damages that resulted from Plaintiffs’ failure to pay income taxes.
It seems that the plaintiffs, who sought class action status for their lawsuit, had money at UBS in Switzerland, and failed to disclose this fact, or the income earned thereon, to the IRS. They joinedone of the IRS amnesty programs, paying back the taxes plus a 20% penalty. (Current amnesty program for undeclared income has a 27½% penalty.)
They sued UBS claiming that UBS failed to tell them they needed to disclose their accounts.
The 7th Circuit Court of Appeals ruled against the plaintiffs, holding that UBS was not obligated to prevent plaintiffs from breaking the law.
Judge Richard Posner, writing for the Court, didn’t pull any punches.
“The plaintiffs are tax cheats, and it is very odd, to say the least, for tax cheats to seek to recover their penalties … from the source, in this case UBS, of the income concealed from the IRS,” Posner wrote. “This lawsuit, including the appeal, is a travesty.”
The Reuters article which reported the story (Read article here) stated that the attorney for the plaintiffs could not be reached for comment.
This does not surprise me.
