Thursday, February 20, 2014

U.S. Senate Committee Investigation of Crackdown on Offshore Tax Evasion (2/20/14)

Senator Levin is at it again.  The U.S. Senate Permanent Subcommitteee on Investigations, which he chairs, "will hold a hearing on a crackdown on offshore tax evasion that has stalled as prosecutors conduct criminal probes of 14 banks, including Credit Suisse Group AG."  Offshore Tax Evasion Will Be Focus of Senate Hearing (Bloomberg 2/19/14), here.  (It is not evident to me how this crackdown on the Swiss bank variety of offshore bank tax evasion is stalled.)  

Here are some other excerpts from the article
The hearing will focus on “the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets,” according to a statement by the committee. Chairman Carl Levin, a Michigan Democrat, estimates that offshore tax avoidance costs the U.S. Treasury more than $100 billion a year. 
Witnesses will represent an unidentified Swiss bank and the Justice Department, the committee said. Since 2009, the U.S. has charged more than 70 U.S. taxpayers and almost three dozen bankers, lawyers and advisers with using hidden accounts to cheat the Internal Revenue Service. At the same time, the Justice Department hasn’t resolved criminal probes involving Credit Suisse, the second-largest Swiss lender, and other banks. 
* * * * 
“If I were Senator Levin, I’d ask the Justice Department, ‘You did this program with the Swiss and 106 banks signed up for non-prosecution, so will you take that prototype to other countries with a history of unreported bank accounts, such as Israel, India, Singapore and Hong Kong?’” said Lawrence Horn, a tax attorney at Sills Cummis & Gross in Newark, New Jersey.


  1. OECD: The United States can remain a tax haven

    Translated from an article in French:

    “The United States has managed to introduce a clause allowing them to avoid
    the new international standards for automatic exchange of information
    set up by the Organisation for Economic Cooperation and Development
    (OECD), which adheres Switzerland and made ​​public last week.

    [...] “Do not be afraid of words emphasizes Jürg Birri, head of the
    department of law at KPMG auditor for German-speaking Switzerland. What
    has been succeeded in the United States is difficult to accept. They
    use the specificities of their FATCA legislation to divert the new
    global law against tax evasion seeing the day and participate in tax
    evasion by non-Americans. “”

    How is that acceptable to the rest of the world?

  2. $CS reached today a $196mio settlement (2002-08) with regards to SEC
    cross boarder matters .....DOJ investigation still unresolved and amount pending.

  3. I found the link in French, easier (for me) to understand than the odd phrasing of Google translate. In a nutshell, the US has introduced a clause exempting itself from automatic exchange of information, in order to participate in tax evasion by non-Americans. The article also refers to the Swiss as turkeys and fascists.

  4. Unrelated to this post, I have some questions.

    What is the effect of reciprocity under FATCA or under the new global OECD reciprocity standards, pertaining to correspondent bank accounts?

    For example, let's say a citizen of France has a bank account in country XYZ, and the bank in country XYZ uses a correspondent bank account in the US for that customer's transactions or custody account?

    Would the French person's account with the bank in XYZ be reportable by the US correspondent bank to the French government under the reciprocity rules, because the XYZ bank uses the US correspondent bank for its custody accounts?


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