ANALYSIS-Asia next in line of fire for U.S. tax police
By Jason Rhodes, Kevin Lim and Joe Rauch
ZURICH/SINGAPORE/CHARLOTTE, July 7 (Reuters) – After forcing Switzerland’s top bank UBS to its knees for helping U.S. residents dodge taxes, U.S. authorities are moving on other banks and countries used to hide clients’ cash.
Washington inflicted a tough lesson last year on Switzerland by forcing the world’s biggest offshore banking centre to lift its treasured bank secrecy and slapping a $780-million penalty on UBS.
The Department of Justice is now going after other offshore centres like Singapore, which have attracted undeclared money that left Switzerland, and has opened a criminal inquiry into Asian clients of Britain’s HSBC Holdings Plc, Europe’s No. 1 bank.
Banks in Singapore and Hong Kong hold estimated offshore wealth worth $700 billion against Switzerland’s $2 trillion, according to the 2010 Boston Consulting Group Wealth Report.
“There are going to be more such cases,” a U.S. Internal Revenue Service source told Reuters. “There’s a lot of talk about money being moved from Switzerland into Asia.”
Swiss lawmakers last month backed a key tax treaty enabling UBS client tax cheats’ data to be handed over to the IRS, ending months of uncertainty that had threatened the recovery of the world’s second-largest wealth manager.
ANALYSIS-Banks not out of woods after Swiss tax ruling
By Kim Dixon
WASHINGTON, Jan 29 (Reuters) – The Swiss court ruling in favor of a U.S. client who stashed funds in a UBS account sets a higher hurdle to aggressive efforts by the U.S. government to go after other banks helping wealthy tax cheats — but the banks are not out of the woods yet.
A Swiss court ruled last week that the client’s failure to file a tax form did not constitute “fraud or the like,” a requirement for data to be revealed under a double taxation agreement with the United States.
The ruling puts in jeopardy Switzerland’s delivery of 4,450 UBS client accounts to U.S. authorities, as agreed in August.
Caught in the crosshairs are other foreign banks the U.S. says it is informally examining for possibly helping U.S. tax cheats. A voluntary amnesty program for those with undeclared income turned up accounts at Credit Suisse, Julius Baer and HSBC, among others.
“It presents a serious roadblock to pursuing other banks,” said Peter Henning, law professor at Wayne State University and a former criminal division attorney at the Justice Department.
Still, the Internal Revenue Service and Department of Justice believe they have a strong case and will want to fight the Swiss ruling. Officials have already said they are informally looking at other unnamed banks.
Order for UBS to release client data ruled unlawful by Swiss court
By Jason Rhodes
ZURICH, Jan 8 (Reuters) – The Swiss financial regulator broke bank secrecy law last year when it ordered UBS to hand over the files of nearly 300 clients to U.S. authorities, a Swiss court said on Friday.
Regulator FINMA decided on Feb. 18 to allow UBS to hand over some client data to U.S. tax officials, weakening the country’s strict bank secrecy rules in an effort to end a damaging probe into its biggest bank, which prompted clients to pull billions of francs from accounts and leave in droves.
“Even though FINMA was in a difficult position because of the threat of charges against UBS AG, it should not have ordered unilaterally the passing on of data outside of a proper process of a request for official assistance,” Switzerland’s Federal Administrative Court said.
Zuercher Kantonalbank analyst Andreas Venditti said the ruling provided more clarity on FINMA’s role in matters of bank secrecy, although the judgement could still be challenged.
“The damage has already been done for UBS and maybe for the whole Swiss banking industry. But if this ruling means FINMA cannot act alone in future, it certainly helps,” Venditti said.
UBS shares extended earlier gains after the ruling was published, ending the session up 3.8 percent at 17.21 Swiss francs. The DJ Stoxx European banking sector index was up 1.24 percent.
U.S. judge rejects leniency for UBS whistleblower
By Tom Brown
MIAMI, Jan 4 (Reuters) – A U.S. judge on Monday upheld the prison sentence of a key informant in the tax fraud case against Swiss bank UBS AG and ordered him to start serving his 40-month term as scheduled this Friday.
The ruling by Fort Lauderdale Federal Judge William Zloch ignored both public and legal pleas for leniency by former UBS banker Bradley Birkenfeld, the main whistleblower in the high-profile case that cracked open Swiss banking secrecy.
Lawyers for Birkenfeld had asked Zloch last month to postpone the Jan. 8 start of his prison term, saying he was ready to cooperate further with the authorities in their pursuit of U.S. tax cheats.
The lawyers also requested reconsideration by Zloch of the jail term he gave Birkenfeld, a 44-year-old U.S. citizen who has been hailed by whistleblower advocates and U.S. prosecutors alike as a vital information source in the U.S. government’s case against UBS, his former employer.
The Swiss bank was targeted in a wide federal probe of thousands of U.S. tax cheats who hid assets in secretive UBS accounts.
In a ruling filed on Monday, Zloch rejected the requests filed on Birkenfeld’s behalf, saying they were denied after careful consideration of their merits.
EXCLUSIVE – U.S. revenue service hires “hundreds” for high-wealth tax cheat unit
By Kim Dixon
WASHINGTON, Dec 11 (Reuters) – A new U.S. Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth in complex business entities is rapidly taking shape with the hiring of hundreds of employees.
The IRS high wealth unit, part of a broader effort to combat international tax evasion, is focusing on “the entire web of business entities controlled by a high wealth individual,” IRS Commissioner Doug Shulman told a tax conference this week.
Another IRS official told Reuters “hundreds” of people have already been hired to staff the new unit, including some from within the agency.
“We have drawn top talent within the IRS that have expertise involving wealthy individuals as well as examination of their related entities,” said Mae Lew, an IRS special counsel.
The high-wealth unit is focusing on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals.
While use of sophisticated legal structures can be legal, in other instances they “mask aggressive tax strategies,” Shulman said.
Swiss would sign Italy tax treaty if off blacklist
ROME, Nov 5 (Reuters) – Switzerland’s Economy Minister Doris Leuthard, visiting Rome on Thursday in the midst of a dispute over tax policies, said her country was willing to sign a double taxation treaty with Italy but only if it was removed from a blacklist of tax havens.
Bahamas signs tax accord with Britain in step toward OECD compliance
NASSAU, Oct 29 (Reuters)- The Bahamas on Thursday signed a tax information agreement with Britain, in a move it heralded as another step toward inclusion on an Organization for Economic Cooperation and Development (OECD) “white list” of countries that meet internationally agreed tax standards.
Britain’s offshore havens asked to bump up taxes
By Huw Jones LONDON, Oct 29 (Reuters) – Britain’s overseas financial havens should bump up taxes to wean their economies off credit crunch hit banking, insurance and funds services, a government-commissioned report said on Thursday.
7,500 offshore tax evaders come clean – U.S.tax chief
WASHINGTON, Oct 14 (Reuters) – Thousands of wealthy Americans have volunteered information about unreported income hidden in overseas accounts ahead of the deadline for a U.S. government tax amnesty program, the U.S. tax commissioner said on Wednesday.
France to tighten rules on dealing with tax havens
PARIS, Oct 7 (Reuters) – The French government plans to strengthen its fiscal rules towards countries on the OECD’s tax “grey list” that have not signed bilateral agreements with France, Prime Minister Francois Fillon said on Wednesday.
-
Author Profile
-
Seems to point out the obvious absurdity of our tax system that an agency of our government has to bully foreign governments to force private enterprises within THEIR borders and following the laws of their nation to accede to US law.
Seems to be way past time to junk the entire income tax system and implement the “Fair Tax”.