Thursday, January 27, 2011

Federal indictment of tax cheat suggests possible implications for HSBC and IRS amnesty program

A recent federal indictment of a wealthy American accused of concealing money from the IRS in foreign tax shelters may signal a large-scale legal action against HSCB. Persons familiar with the indictment of Vaibhav Dahake told the New York Times that HSBC was the unidentified international bank that advised the illegal use of tax shelters.

Federal authorities are said to be considering a legal summons intended to ascertain the degree to which HSBC was actively marketing these illegal services to clients. A similar recent summons served on UBS resulted in the disclosure of several thousand client names.

The indictment of Dahake cited a number of unidentified bankers who advised him, among other things, not to file forms with the IRS and that money transferred between British Virgin Islands accounts and Indian accounts would not be monitored or noticed by US authorities.

A lawyer for Dahake said that he perceived a connection between the indictment and the impending IRS amnesty program for tax cheats. He called the indictment a “clubbed invitation” for wealthy Americans concealing money in foreign accounts to come forward, declare their money, pay their taxes, and suffer reduced fines and penalties as part of the amnesty program.

Wednesday, January 26, 2011

IRS to announce second amnesty program for self-disclosing tax cheats

The IRS will soon be announcing a second amnesty program for Americans concealing accounts in foreign tax shelters; it will not be “as generous” as the last program, which 15,000 Americans opted to participate in (as well as an additional 3,000 after the October 15 deadline).

A white collar criminal defense lawyer told The New York Times that some Americans may have cheated the IRS by paying taxes on a smaller UBS account while concealing larger accounts in a smaller Swiss bank. A current focus of US prosecution is the use of regional Swiss banks, known as cantonal banks, which have been utilized successfully by tax evaders.

While the terms of the impending amnesty program have not yet been outlined in detail, they are expected to be similar to those of the previous program. However, one authority suggested to the Times that guilty parties might be better served by coming forward even prior to the program’s announcement, as ongoing investigations could reveal the offender’s identity before a voluntary disclosure, potentially voiding the possibility of amnesty.

Tuesday, January 4, 2011

Guilty plea from Swiss banker could indicate new direction in US fight against illegal tax havens

A Swiss banker and former UBS employee’s recent guilty plea in a US tax case suggests a possible new direction and commitment for the US in its fight against illegal tax havens abroad.

Renzo Gadola was accused of recently travelling to Miami to advise a wealthy American to illegally conceal her money in a regional Swiss bank. The type of bank into which Gadola had intended to conceal the funds is known as a cantonal bank.

Attorney Brian Skarlatos, whose firm represents numerous former UBS account holders, told The Wall Street Journal that the regional cantonal banks were thought, until now, to be places where it was “safe to hide [US] money because those banks do not do business in the United States.”

Gadola’s guilty plea and cooperation with US officials could mark the beginning of further US efforts to root out illegally hidden, taxable US money in cantonal Swiss banks.