The U.S. Department of Justice Tax Division and the Internal Revenue Service are ramping up a hallmark expanding crackdown on offshore tax evasion, and banks that assist US tax evaders are being faced with potential indictments for felonies wherever they are located.
The government’s blitzkreig extends to Switzerland, where it is aggressively pursuing criminal investigations of a dozen Swiss banks are ongoing, and another 100 banks are seeking to avoid criminal investigations and prosecutions. The IRS has entered jurisdictions including India, Liechtenstein, Luxembourg, Barbados, Hong Kong, Singapore and Israel. (Bank Leumi recently entered into a deferred prosecution agreement with the DOJ, paid a penalty of $270 million, and agreed to identify numerous additional Bank Leumi account holders in the U.S. to the IRS.) Several other investigations in other parts of the world are being pursued in other areas as well, which have not been made public.
15 active federal grand jury investigations of foreign banking institutions In addition there is the recently enacted Foreign Account Tac Compliance Act legislation, which requires that a foreign financial institution identify and reveal American depositors — individual and entity — to the IRS or suffer a 30 percent withholding on withholdable payments and pass-thru payments., along with the DOJ amnesty program for Swiss banks (BSI SA became first Swiss bank in this disclosure program to agree to pay a $211 million penalty and turn over U.S. account holder’s identity to escape criminal charges) to disclose how they aided tax evasion. Taken together, all of the foregoing will result in the eventual disclosure of several thousands of taxpayers’ identities to the IRS.
To date, taxpayers have made more than 52,000 disclosures and tax authorities have collected more than $7 billion from these actions.
Banks that try to hide assets for wealthy US Citizens are being fined hundreds of millions of dollars and criminal indictments threaten the freedom of bank managers. One whistleblower collected over $100 million for reporting such actions by a Swiss bank and more whistleblowers are coming forward each day as they collect awards of up to 30% of what the Government is collecting.
Jeffrey Newman represents whistleblowers