The Internal Revenue Service is demanding that hedge-fund and private-equity investors disclose hundreds of billions of dollars they have invested offshore, boosting scrutiny of accounts popular for tax advantages. The move comes as regulators and lawmakers are seeking to crack down on questionable use of offshore tax havens and could uncover sources of income that aren't being taxed but should be. Those efforts include the investigation into clients of UBS AG, some of whom the Justice Department alleges used offshore bank accounts to evade U.S. income taxes. Investors keep funds offshore for a variety of reasons, and while some offshore investments aren't taxable, others are. It isn't clear if the new disclosure requirements will lead to additional tax revenue. The ramped-up disclosure requirements reflect broader government steps to increase oversight of hedge funds and private-equity funds. The Securities and Exchange Commission and Congress are proposing that hedge fund managers register with the agency. The Obama administration is proposing to end a tax break on compensation for private-equity managers. In past years, a so-called FBAR report, or "Report of Foreign Bank and Financial Account," has been filed by U.S. taxpayers with foreign bank and brokerage accounts. Until now, however, hedge-fund and private-equity investors were advised by their lawyers that they didn't have to worry about it. http://online.wsj.com/article/SB124588728596150643.html