Tax Suspicions Grow on Swiss Accounts
By LYNNLEY BROWNING
NYT
Federal authorities suspect the scandal over Americans’ secret offshore accounts at UBS, the big Swiss bank, runs far deeper than they believed only a week ago.
While UBS admitted last week that it had failed to properly withhold American taxes on 17,000 accounts held by affluent Americans, the authorities are now investigating how the bank and its intermediaries handled taxes for an additional 35,000 accounts, according to two people briefed on the investigation.
At issue is whether UBS withheld taxes, as required by American law, and, if so, where the money went, these people said. If UBS failed to collect taxes on all 35,000 accounts, the bank could owe the Treasury Department as much as $800 million in taxes, interest, fines and penalties, according to a tax lawyer briefed on the investigation, who spoke on the condition he not be named because he is representing UBS clients.
Mark Arena, a UBS spokesman, declined to comment on Wednesday.
(More here.)
NYT
Federal authorities suspect the scandal over Americans’ secret offshore accounts at UBS, the big Swiss bank, runs far deeper than they believed only a week ago.
While UBS admitted last week that it had failed to properly withhold American taxes on 17,000 accounts held by affluent Americans, the authorities are now investigating how the bank and its intermediaries handled taxes for an additional 35,000 accounts, according to two people briefed on the investigation.
At issue is whether UBS withheld taxes, as required by American law, and, if so, where the money went, these people said. If UBS failed to collect taxes on all 35,000 accounts, the bank could owe the Treasury Department as much as $800 million in taxes, interest, fines and penalties, according to a tax lawyer briefed on the investigation, who spoke on the condition he not be named because he is representing UBS clients.
Mark Arena, a UBS spokesman, declined to comment on Wednesday.
(More here.)
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1 Comments:
I am envisioning a triple whammy.
First, the savvy investor gets the invite that allows him to join Bernie Madoff’s investment pool.
Second, the investor is smart enough not to give all his money to Madoff and keeps a portion of it in the overall stock market.
Third, the investor establishes an USB account in Switzerland that is designed to conceal their interest in the accounts and evade reporting requirements while trading in securities and using debit or credit cards linked to those accounts.
Let’s tally it up !
First, the Madoff money is gone.
Second, the overall market has probably seen a 30 to 50% decline depending upon how well the savvy investor timed the sales.
Third, USB has now agreed to provide your name to the IRS and DOJ. A willful failure to report a foreign bank account could result in a very steep penalty (50% of the account amounts at the time of each violation – not its value now but at the time of the violation … like during the market run-up of 2001-2008).
I know now appreciate Congresswoman Bachmann’s concern that "We're running out of rich people in this country."
Oversight of USB and the use of offshore tax havens were to be investigated by Norm Coleman’s committee. Since Carl Levin has taken over leadership of the committee, the investigations have produced alarming reports.
This is not the first time that USB has agreed to pay fines. Last August it paid nearly $20 billion to settle charges about misleading investors in auction-rate securities, as well as an additional $150 million in fines. Citigroup also bought back auction-rate securities that it had sold and paid about $100 million. USB may be a Swiss company, but Citi continues to receive taxpayer investment.
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