Feds follow the money to nab worst tax evaders
The U.S. and other countries around the world are cracking down on offshore accounts in a bid to identify and penalize suspected tax evaders. Other investigations show the U.S. itself has become a site for offshore tax evasion.
In the U.S. alone, use of secret offshore accounts to evade federal taxes has cost the Department of the Treasury at least $100 billion annually, a 2008 Senate report estimated.
U.S. taxpayers whose gross income exceeds a minimum threshold are required to file annual tax returns that report income from all sources worldwide. Federal laws also require the owners to submit IRS reports showing the existence of any foreign accounts, as well as separate disclosures for offshore accounts with an aggregate value of $10,000 or more.
Department of Justice and IRS investigators launched their crackdown in 2008 by focusing on Swiss banking giant UBS. Headquartered in Zurich and Basel, centers of Switzerland’s long
tradition of banking secrecy, UBS actively marketed its financial services to American clients.
In 2009, UBS acknowledged that it created undisclosed offshore accounts for American clients and sent its bankers on secret trips into the U.S. to help the clients evade taxes.
The efforts included equipping the bankers with encrypted laptops to thwart any investigation and having the bankers handdeliver cash from the secret accounts without any identifying paperwork.
UBS agreed to a deferred-prosecution agreement that required the bank to pay a $780 million settlement and turn over account information for nearly 4,500 U.S. clients. From that beginning, U.S. investigators have broadened the probe’s focus to dozens of other Swiss banks, as well as banks, financial institutions and other companies in Luxembourg, Lichtenstein, the Caribbean, Panama, Israel, India and other locations suspected as havens for offshore tax evasion.
Dozens of former Swiss bank and other foreign bank clients have been accused of ducking the IRS in recent years. A few have been sentenced to prison terms. For instance, U.S. military doctor Michael Canale of Jupiter, Fla., was sentenced to a six-month federal prison term in 2013 after he pleaded guilty to failure to no- tify the IRS about Swiss bank accounts that three years earlier had held nearly $1.5 million.
In all, the IRS has collected billions of dollars in back taxes, interest and penalties from U.S. taxpayers who either were charged in the investigations or reached settlements under leniency programs.
The wrong company logo appeared with an item about Alexion Pharmaceuticals on the April 1 America’s Markets page. The correct Alexion logo is shown here.