Senator Hearing Focuses on Offshore Tax Evasion
The United States permanent subcommittee will be holding a hearing as they try to solve issues surrounding offshore tax evasion as prosecutors conduct criminal probes of 14 banks including credit Suisse Group AG.
According to a statement by the committee, the focus will be on the status efforts to hold the United States clients and the Swiss banks responsible for unpaid tax on billions of dollars in hidden assets. Chairman Carl Levin estimates that the tax avoidances cost the United States treasury more than $100 billion annually.
The committee since 2009 has charged about 70 US taxpayers and up to three dozens of banks, lawyers and advisors who used hidden accounts to cheat the internal revenue service. The committee said that witness will represent the unidentified Swiss bank and the Justice Department.
A former assistant attorney general Nathan Hochman said “I’m certain that Senator Levin will inquire as to the status of the investigations with respect to these banks, Senator Levin plays an important role because he brings the bully pulpit to this area and can pressure the government one way or another to make decisions on what it wants to do with these investigations.”
In February 2009 there was a big break when the largest Swiss bank UBS AG (UBSN) was charged with assisting thousands of US clients to evade tax. It evaded prosecution by paying $750 million and admitted evasion by giving IRS data of more than 250 accounts and later 4,450 more accounts.
Since that time 43,000 Americans have avoided prosecution through the amnesty program at the IRS by paying $6 billion in back taxes, penalties and fines. They gave the IRS a trove of leads about offshore banks and advisers that have allowed the U.S. to build criminal cases that weren’t previously possible because of the way Swiss bank secrecy shielded client identity.
The data have assisted to pin down criminal probes of 14 firms including HSBC Holdings Plc which is the largest bank in Europe, credit Suisse and Julius Baer Group Ltd which is Switzerland’s third largest wealth manager.
The assistant attorney general Kathryn Keneally said in her first interview since resuming office in April 2012 that the enforcement drive has forced a remarkable change in the ability of the United States to track down secret accounts in Switzerland. She also added that it is foolish for someone to think that if he has an account in Switzerland it will remain a secret.
Credit: KP Inside