NYT Editorial: The Tax Cheats and Their Banks

The Obama administration is rightly keeping the pressure on tax cheats and the bank executives who help them by stashing their money in secret accounts overseas. Now we would like to see the Internal Revenue Service and the Justice Department take the battle to the banks themselves. That’s the only way of getting them to drop this lucrative and illegal business.

The Justice Department has charged five bankers with helping wealthy Americans conceal their assets from American authorities. A former employee of Switzerland’s UBS who now works for rival Credit Suisse was arrested in January and accused of helping 100 to 150 Americans hide as much as $500 million from tax authorities.

A few weeks later, three former employees and one current banker at Credit Suisse were indicted for helping 17 Americans conceal assets in accounts at the bank and then helping them move the stash to other banks in Switzerland, Hong Kong and Israel once it was clear American authorities were on the trail of tax evaders at big Swiss banks.

This is a promising route both to recover unpaid taxes and to deter other Americans from trying to evade the I.R.S. this way. So far, however, the banks have faced no charges. The country-hopping by the Credit Suisse account holders in search of a safer hiding place suggests that cross-border tax evasion won’t be shut down until the institutions determine that secret offshore accounts are too risky a business.

(More here.)