OT:Billions of dollars coming into the U.S. Treasury
VicXnews
Tue Nov 17, 2009 7:26pm EST
Nearly 15,000 Americans admit offshore tax cheating
Kim Dixon
WASHINGTON
Tue Nov 17, 2009 7:26pm EST
http://www.reuters.com/article/idUSTRE5AG3IU20091118
WASHINGTON (Reuters) - Some 14,700 rich Americans, worried about a stepped-
up U.S. crackdown on offshore tax cheats, have turned themselves in under
the government's amnesty program.
U.S.
The Internal Revenue Service amnesty program, which ended in October,
offered reduced penalties for voluntarily disclosing previously undeclared
foreign holdings. It is part of a broader effort by the United States and
other authorities to crack down on tax evasion.
Of the nearly 15,000 newly disclosed accounts, many involved bank accounts
in Switzerland and Europe, but assets were hidden in more than 70
countries.
Participation in the IRS program was "unprecedented" and the final number
was nearly double the agency's estimate in October, U.S. Internal Revenue
Service Commissioner Douglas Shulman told reporters in a telephone
briefing.
Barbara Kaplan, a lawyer for high net-worth clients in New York, said: "The
IRS has never got anything like that in response to prior initiatives. It's
a little higher than I anticipated based on the pace of my own practice and
the panic that was out there."
A high-profile U.S. lawsuit against Swiss banking giant UBS AG led the bank
to agree earlier this year to promise to reveal the names of 4,450 client
accounts held by Americans. Those accounts at one time were worth a total
of $18 billion.
While IRS officials were still analyzing the amount of offshore assets
declared in the amnesty program, Shulman said, "we are talking about
billions of dollars coming into the U.S. Treasury" from the new
disclosures.
One IRS official said that at the end of the amnesty program, there was a
"significant influx in accounts with holdings in the Far East."
The IRS has said recently it is focusing on funds flowing out of Europe and
into Asia, and is opening a new office in Beijing.
UBS DEAL STANDS
Shulman also said the outpouring of information about hidden offshore
accounts had no bearing on the legal obligation of UBS to turn over names
of 4,450 American account holders. There had been some speculation that
success in the amnesty program might affect how much information UBS had to
share.
"Some have misinterpreted this," Shulman said.
The IRS emphasized it would closely examine the new information with an eye
toward what role tax advisers played in helping their clients hide assets.
Shulman declined to say if the IRS was looking at other financial
institutions.
The voluntary amnesty program was open to accountholders of all banks, and
lawyers have said customers from Credit Suisse Group AG and HSBC Holdings
are among those that took part.
CRITERIA FOR UBS NAMES
The U.S. and Swiss governments on Tuesday also released the criteria that
will be used to select the 4,450 accounts that UBS must eventually provide
to the IRS.
The Swiss Justice Department said it would hand over the names of wealthy
American clients of UBS with accounts holding more than 1 million Swiss
francs ($986,200) where there is a reasonable suspicion of tax fraud.
Accounts of a lesser size, as low as 100,000 Swiss francs, could be
included in certain circumstances when there is a "scheme of lies"
identified, according to the document.
"The threshold for disclosing accounts, in my opinion, is low," said Kevin
Thorn, a Washington-based tax lawyer. "Most believed the threshold would
have been $1 million-plus but it appears the government is holding to its
word and looking at conduct more than amounts and is going after taxpayers
across the board."
Also included in the criteria is suspicious activity related to the use of
debit cards, cell phones or wire transfers to hide accounts.
Senator Carl Levin, whose congressional panel has investigated tax evasion
for several years, said the language leaves too many loopholes for the
Swiss.
"The tortured wording and the many limitations in this (agreement) shows
the Swiss government trying to preserve as much bank secrecy as it can for
the future, while pushing to conceal the names of tens of thousands of
suspected U.S. tax cheats," said Levin, a Democrat. "It is disappointing
that the U.S. government went along."
The IRS said the criteria will identify the accounts it is most interested
in and those that would be hardest for the agency to identify on its own.
The criteria apply to UBS accounts held between 2001 and 2008 by U.S.
citizens.