Tax Evaders Face Choice: Pay or Pray

[Number Six]

http://www.nytimes.com/2009/10/13/busin ... f=business

[Judge Roy Bean]

Or you can always be appointed to a position in the administration.

[bmielke]

The I.R.S. disclosure program is also creating headaches in the hush-hush world of private banking. It requires people to disclose the names, addresses and telephone numbers of bankers, lawyers, accountants, tax advisers and trust officials who helped them evade taxes.

How many people is this program really going to take down? Are there alot of accountants, advisors, and lawyers who did this sort of thing or just a few? It seems like the IRS is looking to not only catch the offenders but also the infastructure that made it possible to offend.

[Number Six]

Two ideas occur to me as this major crackdown approaches the endgame--there are some really wealthy people out there without the primitive tactics of people like Ed Brown, who might try something really destructive and get away with it. Secondly, many people will associate the offshore banking crackdown with the current Administration, when, in actuality, the MLATs and other initiatives started a long time ago.

[DoingHomework]

Secondly, many people will associate the offshore banking crackdown with the current Administration, when, in actuality, the MLATs and other initiatives started a long time ago.

True, but Obama has made going after wealthy tax cheats one of his personal crusades so I think any credit will be savored.

I guess I don't see anything wrong with going after those who have cheated in the past. But I am bothered by the possible "guilt by association." If my lawyer just happened to have, 25 years ago, advised a client to do something perfectly legal and the client just happened to have heard "stash all your money in Switzerland and don't tell anyone," why should I be audited just because I am also a client. Sure, I have nothing to hide, but I also have a job and could not afford the time away from work to play along with a fishing expedition. I know that sounds paranoid, and I am really not that worried about it, but this kind of thing is exactly what the government os trying to do!

[Judge Roy Bean]

True, but Obama has made going after wealthy tax cheats one of his personal crusades
...

What do you base that on?

[Demosthenes]

True, but Obama has made going after wealthy tax cheats one of his personal crusades so I think any credit will be savored.

No he hasn't. Unless you think appointing them to cabinet positions is "going after" them.

The Swiss bank account / UBS prosecutions pre-date Obama by a couple of years.

[Number Six]

9-11 probably provided the political impetus necessary for the U.S. DOJ and IRS to go after offshore banking in a substantial way. But if you track back issues of The Sovereign Society:(http://www.sovereignsociety.com/) especially after the founders' bellwether book--"The Sovereign Individual"-- it should be clear that this particular brand of "white collar crime" and its prosecution when it is not done legally, declaring offshore accounts when filing taxes, etc., is not an issue a particular political party is responsible for. There were many allies and friends of the Bush administration that could not be protected by them from various investigations. David Cay Johnston's 2004 book "Perfectly Legal" shows where the line gets drawn between legal tax avoidance and the illegal alternative.

[Judge Roy Bean]

Fascinating read on how the game has been played:

http://www.latimes.com/business/la-fi-s ... 6699.story

Bradley Birkenfeld, who used to help wealthy Americans hide millions from the IRS for a Swiss bank, turned informant and triggered a crackdown on tax cheats.

He got three years. I hope they can keep him out of danger.

[Demosthenes]

UPDATE 1-U.S. serves tax probe subpoenas in NY area
Wed Oct 28, 2009 7:14pm EDT

* Client names believed from first batch UBS handed over
* Justice Department declines to comment
By Kim Dixon

WASHINGTON, Oct 28 (Reuters) - The U.S. government has served subpoenas on wealthy individuals in recent days in the New York area, targeting those who may have evaded taxes using offshore accounts at Swiss bank UBS AG, lawyers said on Wednesday.

The lawyers believe the subpoenas are based on between 250 and 280 account names the government received earlier this year when UBS paid $780 million to settle a criminal prosecution.

David Gannaway, a tax attorney at Marks Paneth in New York, has a client who has received a subpoena and knows of others.

Two other attorneys also said they had clients who had received subpoenas.

A spokesman for the U.S. Department of Justice declined to comment.

U.S. tax authorities say a clampdown on wealthy tax cheats is a top priority. The Internal Revenue Service recently opened a new unit to police high net-worth individuals.

"I think they always have known that (tax evasion among the wealthy) is rampant. They didn't know that it is this extreme," said Gannaway.

By one estimate, the U.S. loses $100 billion a year to individual and corporate tax evaders.
In August, UBS agreed to settle a separate civil case brought against it by the U.S. government, and said it would eventually hand over the names of 4,450 American clients. At their high point, the accounts of those clients were worth $18 billion, according to the IRS.

[Judge Roy Bean]

UPDATE 1-U.S. serves tax probe subpoenas in NY area
Wed Oct 28, 2009 7:14pm EDT

* Client names believed from first batch UBS handed over
* Justice Department declines to comment
By Kim Dixon
...
U.S. tax authorities say a clampdown on wealthy tax cheats is a top priority. The Internal Revenue Service recently opened a new unit to police high net-worth individuals. [As long as they aren't elected representatives or connected to the Administration.]