OFFSHORE TAX HAVENS: Where The Wealthy Ask, "What -- Us Duck TAXES?"
D. Cheney
are well-insulated from any of the nasty problems associated with sub-
prime mortgages, investment banks, food prices, and mysterious
gasoline costs that plague most U.S. citizens.
But, as usual within their close-held fiefdoms, they don't want their
secrets to get out.
Sometimes, however, articles like the following DO get released. But
mainly, these unfortunate leaks serve to warn the fat cats that they
need to do some "adjusting," to maintain their one-step lead ahead of
the IRS.
Nothing YOU wouldn't do in the same position.
But then you got your tax "rebate," so quit bellyaching!
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"Havens Cost U.S. $100 Billion a Year"
"Senate Report Cites 2 European Banks"
By Bradley S. Klapper
Associated Press
Thursday, July 17, 2008; D03
GENEVA, July 16 -- A U.S. Senate subcommittee accused banks in
Switzerland and Liechtenstein of helping wealthy Americans evade
billions in taxes each year, and urged tougher laws to combat offshore
tax havens around the world.
In a report released late Wednesday, the Senate subcommittee on
investigations estimated that offshore abuses were costing U.S.
taxpayers about $100 billion a year.
It recommended reforms to squeeze tax cheats, including more stringent
U.S. requirements for foreign banks and harsher penalties for
institutions that fail to provide the Internal Revenue Service with
details on accounts American clients hold.
"Tax havens are engaged in economic warfare against the United States
and the honest, hardworking American taxpayer is losing," said Sen.
Carl M. Levin (D-Mich.), chairman of the subcommittee on
investigations. "Congress needs to enact strong penalties on tax haven
banks that help U.S. taxpayers avoid paying taxes."
A Senate subcommittee hearing will be held Thursday.
The 109-page report took aim at Switzerland's UBS, arguably the
world's largest wealth manager, and Liechtenstein's LGT group, owned
by the principality's royal family.
The Swiss Finance Ministry and UBS declined to comment. The bank has
said it is cooperating with Swiss and American investigations and will
disclose records involving U.S. clients who might have broken tax
laws. It has also banned its Swiss bankers from traveling to the
United States.
[LGT said it "has always been and continues to be in compliance with
pertinent laws and regulations," according to Bloomberg News. The
committee examined isolated cases that "do not reflect the way LGT is
generally doing business today," it said.]
A U.S. federal judge ruled earlier this month that the IRS could serve
legal papers to UBS in an expanding investigation of U.S. taxpayers
who may have used overseas accounts to hide assets.
The Justice Department requested the summons after former UBS private
banker Bradley Birkenfeld, 43, pleaded guilty in a Florida federal
court to defrauding the IRS. Birkenfeld, who is cooperating with
investigators, said in court that UBS has about $20 billion in assets
in undeclared accounts for U.S. taxpayers.
Prosecutors say Birkenfeld and others helped California billionaire
Igor Olenicoff hide $200 million in assets overseas. Olenicoff, who
controls a real estate empire, pleaded guilty last year to tax charges
and agreed to pay the IRS more than $52 million.
U.S. taxpayers are required to report all foreign financial accounts
if their value exceeds $10,000, prosecutors said. Failure to report
the accounts can result in a penalty of as much as 50 percent of their
amount.
The subcommittee report said, "UBS Swiss bankers targeted U.S.
clients, traveled across the country in search of wealthy individuals
and aggressively marketed their services to U.S. taxpayers who might
otherwise never have opened Swiss accounts."
It said the bank's practices resulted in billions of dollars of U.S.
taxpayer money in accounts not disclosed to the IRS.
Although UBS did not technically violate U.S. reporting requirements
under the 2001 "qualified intermediary program," it actively assisted
clients in structuring their Swiss accounts to avoid disclosure
responsibilities with the IRS and thus aided tax evasion, the report
said.
In Liechtenstein, the report said the royal family's LGT Group aided a
"culture of secrecy and deception" that enabled clients to "evade U.S.
taxes, dodge creditors and ignore court orders."
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/16/AR2008071603035.html