U. S. to seek client names from UBS in tax case
From Wall St Journal 5/15/08 article
“U.S. prosecutors are expected to confront Swiss banking giant UBS AG with a broad subpoena for the names of wealthy American clients who may have used its services to avoid income taxes, according to lawyers and others involved in the case.
The subpoena would follow an indictment, unsealed Tuesday in Florida federal court, of former UBS private banker Bradley Birkenfeld and his alleged accomplice, Mario Staggl, a Liechtenstein businessman skilled in setting up intricate trusts in Europe and offshore tax havens. Mr. Birkenfeld pleaded not guilty Tuesday in Fort Lauderdale. Mr. Staggl, who is at large and believed to be in Liechtenstein, didn’t return phone calls or emails for comment…
The investigation focuses on whether UBS, Mr. Birkenfeld and Mr. Staggl helped clients hide assets in Swiss and Liechtenstein accounts, moves that allegedly allowed the clients to avoid reporting taxable income to the Internal Revenue Service from 2001 at least through 2006.”
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Probe May Lay Open UBS
From Wall St Journal article 5/8/08:
US prosecutors are investigating whether the private bank, which provides services to wealthy individuals, was involved in tax-evasion schemes that may have been carried out through Liechtenstein, a European principality that was beyond the reach of US tax officials. The US investigation is being aided by a former UBS insider who has met with US prosecutors, according to two people with knowledge of the situation. US securities regulators also are conducting an inquiry.
The US probe into UBS’ private bank, the world’s largest as ranked by assets under management and one that prides itself on conservatism and confidentiality, threatens to implicate UBS clients. The former UBS employee, who also is under investigation for potential wrongdoing, has provided US officials with names of American clients of UBS, said the people familiar with the probe.
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Swiss banks refuse blame for foreign clients’ tax evasion
From 5/5/08 International Herald Tribune:
Swiss banks cannot be expected to police foreign clients’ tax affairs, one of the country’s top banking officials said Monday, rejecting German demands for greater cooperation to catch tax evaders.
The president of the Swiss Bankers Association laid the blame for tax evasion squarely at the feet of governments that demand too much of their citizens’ income.
“Countries which worry about tax evasion of their citizens should have a good think about the way they tax their people,” Pierre Mirabaud told journalists in Geneva.
The European Union, in particular Germany, has been pressuring Switzerland to crack down on EU citizens who hide money in Swiss banks in order to avoid paying higher taxes at home.
Switzerland, which is not a member of the 27-nation bloc, fiercely protects the privacy of banking customers, including foreigners who have deposited more than 1 trillion Swiss francs (US$950 billion; €640 billion) in its vaults.
“It’s necessary to clearly show Germany and the European Union where their sphere of influence ends and where our sovereignty begins,” Mirabaud said, adding that his members don’t regard themselves as responsible for their clients’ actions.
“We are not a tax authority and we are not a police authority,” he said.
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IRC §7201. Attempt to Evade or Defeat Tax
From IRS Website:
9.1.3.3.2 (08-11-2003)
IRC §7201. Attempt to Evade or Defeat Tax
By operation of the criminal fine provisions under 18 USC §3571, the maximum permissible fines for the violations of IRC §7201, is at least $250,000 for individuals and $500,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss.
Internal Revenue Service Convictions for 2007
Trac Reports has published their Internal Revenue Service Convictions for 2007
The latest available data from the Justice Department show that during FY 2007 the government reported 1,081 new convictions which had been referred by the Internal Revenue Service. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC), this number is down 1% over the past fiscal year when the number of convictions totaled 1,092.
“Fraud and False statements” (Title 26 U.S.C Section 7206) was the most frequently recorded lead charge. Title 26 U.S.C Section 7206 was also ranked 1st a year ago and 1st five years ago. It was ranked 2nd ten years ago and 3rd twenty years ago.
Ranked 2nd in frequency was the lead charge “Attempt to evade or defeat tax” under Title 26 U.S.C Section 7201. Title 26 U.S.C Section 7201 was ranked again 2nd both a year ago and five years ago. However, it was ranked 1st ten year ago and 1st twenty years ago.
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