The Permanent Investigations Subcommittee of the Senate Committee on Homeland Security and Governmental Affairs held a hearing and released a 115-page report yesterday on offshore tax evasion, which it says costs the U.S. around $100 billion a year. It focuses on two European banks in what subcommittee chairman Carl Levin (D-MI) calls offshore secrecy jurisdictions, Switzerland and Liechtenstein.
The report explains that the Swiss bank UBS has 20,000 accounts for U.S. clients but only 1,000 of those have been reported to the IRS for tax purposes. The remaining 19,000 hold around $18 billion. Liechtenstein's LGT is known to have had several thousand offshore accounts but it is unclear how many belong to Americans.
The report details how both banks advised and assisted clients in structuring financial arrangements to avoid reporting income to the IRS in order to escape taxes. It includes detailed examples of specific taxpayers helped by these institutions to avoid their taxes
Levin introduced a bill last year to crack down on offshore tax havens. It has four cosponsors, Norm Coleman (R-MN), Barack Obama (D-IL), Sheldon Whitehouse (D-RI) and Ken Salazar (D-CO). A companion bill was introduced in the House by Representatives Rahm Emanuel (D-IL), Lloyd Doggett (D-TX) and Rosa DeLauro (D-CT) and has 46 cosponsors. The legislation includes a presumption that offshore trusts and shell corporations in designated tax havens are controlled by the taxpayers funding them or directing them. It would also allow the federal government to order American banks to stop accepting or authorizing credit cards from foreign countries or banks not cooperating with U.S. tax enforcement laws.
These reforms are important to anyone who pays her fair share in taxes -- and is tired of subsidizing people who don't.