The days of secret bank accounts are numbered for U.S. taxpayers and European tax dodgers should also watch out after the United States and Swiss bank UBS AG agreed to settle a tax evasion case.
Details of the deal were not made public after the settlement was initialled on Wednesday.
But tax experts expect the settlement to involve the disclosure to U.S. tax authorities of thousands of names of U.S. residents suspected of using secret Swiss accounts to conceal assets, albeit without formally breaching Swiss bank secrecy.
“It is clear that U.S. citizens that formally believed they could hide money in Switzerland and other offshore centres will now conclude it is not safe,” said Michael Weinstein, a lawyer at law firm Cole Schotz who is advising UBS clients.
“The deal is going to force individuals to come forward and reveal those secret accounts voluntarily. If not, UBS will.”
UBS has already promised to stop offering offshore accounts to U.S. citizens and is closing down existing undeclared accounts.
Many other Swiss and foreign banks have also already started to kick out U.S. holders of secret accounts or force them to comply, leaving them little room to hide in anticipation of further action by the U.S. Internal Revenue Service.
“For U.S. taxpayers it is going to be impossible to hide money in Switzerland and it is just a matter of time that this is the case also for Germans and Britons,” Asher Rubinstein, a partner at law firm Rubinstein & Rubinstein, said. “Switzerland will no longer be a tax haven.” Tax lawyers say many of UBS’s competitors are sending letters to U.S. clients asking them to transfer their funds to a U.S. tax-compliant entity.
However, some secret account holders, who range from well-travelled businessmen to Jewish families who had fled hostile countries, could not stomach transferring between 40 and 60 percent of their hidden fortunes to U.S. tax authorities.
“For every three to four clients that come here, there are one or two who, when we do the numbers, say: I cannot write a cheque that big. I will take my chances,” Rubinstein said.
(Source: Reuters)
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4 Responses
They weren’t concerned about transferring “40 and 60 percent of their hidden fortunes” to the IRA – the money was owed when earned – meaning 40-60% of the money consisted of tax revenues that they ripped off.
The Jewish families who fled hostile countries would have to be pretty old and would have to have fled to America, become citizens, and then earned taxable income, and stashed it in their Swiss bank accounts. Not likely. If they owe American tax on the money, it wasn’t money they hid from the Nazis.
This is bigger than Madoff, except whereas Madoff mainly robbed from the rich, UBS and its customers were ripping off the hard working taxpayers of the counttries whose citizens were cheating.
What happened to the world? If there was one thing for certain politically, it’s that Switzerland represented a safe place for people to find refuge beyond the reach of coercion. It was the last significant outpost of economic freedom for the world. Whether we benefited personally from it or not doesn’t matter so much. It was important to know they existed.
Switzerland stood up to the Kaiser in world war 1, they stood up to Hitler yemach shmoy in world war 2, but they can’t stand up to Obama…
Obama’s cabinet must be shaking in their boots.
#2 – The Swiss know the difference between tyrants (bad) and democratic countries collecting taxes (good). Most Americans pay their taxes, as do most Swiss, and the handful of people who were caught cheating shouldn’t get a free ride. It should be noted that if they resigned their American citizenship and moved away, they wouldn’t be subject to American taxes.