Tax Fraud Blog

• UBS, U.S. and Swiss reach deal on releasing names of possible tax evaders

  UBS AG and the U.S. and Swiss governments have worked out agreements to settle a dispute over whether the Swiss bank should be forced to disclose the names of 52,000 wealthy American clients suspected of tax evasion, media outlets reported today.

  UBS and the two governments have initialed [...]

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  Posted: August 12, 2009, 1:42pm EDT
  

• Guernsey: low-tax jurisdiction or tax haven?

  The New York Times ran an article today about Guernsey's popularity with rich Britons who take advantage of a loophole in British law that allows individuals to become nonresidents for tax purposes but remain citizens as long as they do not spend more than 90 days a year on [...]
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  Posted: August 07, 2009, 4:58pm EDT
  

• Op-ed advocates maintaining strict Swiss financial privacy laws

  The president of a Swiss research institution argues today in a New York Times op-ed that Switzerland should maintain its strict banking privacy laws despite pressure from other countries to change them.
  
  ". . . Our financial privacy laws are a foundation for individual dignity and basic property" [...]
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  Posted: August 03, 2009, 1:03pm EDT
  

• UBS, Swiss and U.S. reach agreement on info about U.S. clients

  UBS and the Swiss government have reached an agreement in principle with the U.S. to give the U.S. information about some American UBS clients who the U.S. maintains are evading taxes through accounts with the Swiss bank, according to media reports.
  
  Reuters reported that, "A U.S. government source" [...]
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  Posted: August 03, 2009, 12:26pm EDT
  

• For-profit operations require not-for-profit hospital system to pay taxes

  A state judge has ruled a healthcare provider system in Minnesota has to pay personal property taxes on office equipment in its corporate headquarters because it runs for-profit operations as well as not-for-profit hospitals, Modern Healthcare reports.
  
  Details about the case involving ProHealth Care are found at Modern [...]
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  Posted: July 23, 2009, 4:15pm EDT
  

• UBS fight with IRS convinces Swiss banks to drop U.S. clients

  More ripples from the UBS-IRS standoff: Some Swiss banks reportedly aren't accepting or are cutting off U.S. clients out of concern the Internal Revenue Service might get into a similar fight with them over client account information as it has with UBS AG.
  
  DowJones Newswires says it's "a sign'" [...]
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  Posted: July 22, 2009, 5:02pm EDT
  

• Legal tactic helps uncover offshore bank accounts

  The Washington Post features an article today about a special trial attorney at the Internal Revenue Service who is credited with devising a legal tactic for uncovering the identities of offshore account holders.
  
  John McDougal and his team at the IRS began in 2002 to use "John Doe" [...]
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  Posted: June 29, 2009, 11:55am EDT
  

• U.S. says it will continue case against UBS; plea agreement reached with UBS client

  The Justice Department issued a statement denying it was considering dropping a high-profile case against UBS AG as reported in The New York Times.
  
  The Justice Department is trying to force the Swiss bank to provide the names of 52,000 U.S. clients suspected of offshore tax evasion.
  
  [...]
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  Posted: June 25, 2009, 9:12am EDT
  

• Justice Department and UBS settlement reported likely

  The New York Times reported today that the U.S. and UBS AG are likely to reach a settlement possibly as soon as mid-July over the Justice Department's efforts to get the names of 52,000 UBS clients who the U.S. says evaded taxes.
  The Times said that Swiss government officials are considering [...]
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  Posted: June 23, 2009, 12:00pm EDT
  

• Hong Kong warns banks about tax evasion

  The Hong Kong government has sent a letter to the top executives of all banks in the city warning them not to assist any clients in evading taxes, whether domestic or foreign taxes.
  Karen Kemp, executive director of banking policy for Hong Kong, said in the letter that any [...]
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  Posted: June 23, 2009, 11:43am EDT
  

• U.S, Switzerland agree to increase the exchange of tax information

  The U.S. and Switzerland have reached an agreement to increase the exchange of tax information between the two countries, the U.S. Department of Treasury announced today.
  
  The announcement comes as the IRS continues to pursue its investigation into tax evasion by wealthy U.S. citizens who are clients of [...]
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  Posted: June 19, 2009, 12:20pm EDT
  

• Prosecutors indict web of players involved in tax shelters

  Seven people involved in setting up tax shelters sold to wealthy individuals were indicted by federal authorities, including the chairman and chief executive of BDO Seidman and a well-known tax attorney.
  
  Those indicted include BDO Seidman executive Denis Field and tax attorney Paul M. Daugerdas, according to The [...]
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  Posted: June 10, 2009, 12:39pm EDT
  

• Congress considers bill to stop use of offshore tax havens

  Congress is considering bills to curb use of offshore tax havens to evade U.S. taxes through a variety of measures.
  
  Similar bills were introduced by Sen. Carl Levin (D-MI) and others in the Senate and U.S. Rep. Lloyd Doggett (D-Texas) and Rep. Rosa DeLauro (D-CT) in the House. Sen. [...]
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  Posted: June 08, 2009, 1:24pm EDT
  

• Ouster of USB executive may indicate cooperation with IRS

  Swiss bank UBS has removed the top executive who was in charge of secret offshore accounts for wealthy Americans, The New York Times reported.
  
  UBS's decision to place banker Martin Liechti on paid leave "raises questions about what kind of client information UBS may be preparing to provide to'" [...]
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  Posted: March 30, 2009, 1:02pm EDT
  

• IRS will trade leniency for information

  Citizens who voluntarily pay taxes owed on offshore assets could escape criminal prosecution if they provide the Internal Revenue Service with information about the bankers who helped them hide their assets, according to The Wall Street Journal.
  
  "A key part of the program, IRS officials said, is 'developing'" [...]
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  Posted: March 27, 2009, 1:14pm EDT
  

• IRS tightens reporting requirements on offshore accounts

  In another effort to hinder efforts to evade taxes on offshore accounts, the Internal Revenue Service is tightening certain reporting requirements.
  
  The changes include requiring taxpayers to specify on the Foreign Bank Account Report the exact amount in offshore accounts. The Wall Street Journal reports that the IRS [...]
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  Posted: March 25, 2009, 2:15pm EDT
  

• White House task force formed to examine tax system

  The Obama administration is looking for ways to reform the U.S. tax system and to aggressively reduce the tax gap, such as by attacking tax evasion.
  
  Administration officials announced March 25 that a task force headed by former Federal Reserve Chairman Paul Volcker will study options and make recommendations [...]
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  Posted: March 25, 2009, 1:53pm EDT
  

• Treasury report skeptical of "Son of Boss" settlement impact

  Nearly one-fourth of the investors in the "Son of Boss" abusive tax shelter who participated in a settlement with the Internal Revenue Service failed to file their returns on time, paid their taxes late or failed to file returns at all, according to a report by the U.S. Treasury Inspector [...]
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  Posted: February 03, 2009, 3:11pm EST
  

• No federal contracts for delinquent taxpayers under U.S. bill

  A bill has been introduced in Congress that would prohibit companies from getting federal contracts if they were delinquent in paying taxes.
  
  "Studies by the Government Accountability Office have repeatedly shown that thousands of federal contractors owe over a billion dollars in unpaid taxes," says a press release issued [...]
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  Posted: January 17, 2009, 2:44pm EST
  

• IRS willing to bend with hard economic times

  The IRS announced this week that it is willing to allow some leniency for people who are facing major economic problems and are unable to pay taxes they owe.
  
  For instance, the IRS said in its announcement:
  "IRS employees will have greater authority to suspend collection actions in certain" [...]
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  Posted: January 08, 2009, 10:58am EST
  

• Ponzi scheme victims have tax options

  The New York Times today explores tax options for those who lost money in Bernard Madoff's investment fund that is suspected to have been a Ponzi scheme:
  File amended returns and seek tax refunds. However, taxpayers generally can amend tax returns only for the three years prior to discovering a' [...]
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  Posted: January 07, 2009, 11:21am EST
  

• Offshore tax havens investigated as part of Madoff case

  Government investigators are looking into the role that offshore tax havens may have played in the Ponzi scheme that Bernard L. Madoff is suspected of orchestrating, the New York Times reported today.
  
  "Of particular interest is whether Mr. Madoff and some of his investors used funds based in offshore" [...]
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  Posted: December 31, 2008, 11:57am EST
  

• Former Bechtel tax manager acquitted

  A federal jury acquitted a former global tax manager for Bechtel of charges that he had caused the company to file a false tax return, The Recorder reports.
  
  Prosecutors said the tax manager, Mark Muntean, knew the tax credit was improper, but Muntean's lawyer said his client relied on' [...]
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  Posted: December 22, 2008, 5:16pm EST
  

• IRS enforcement shift seen after KPMG case

  CFO.com says the outcome of the KPMG tax shelter case could mean "the direction of government tax-shelter enforcement in both personal and corporate cases may change."
  
  One tax attorney said, "We've been dealing with these personal shelters for a decade now, and the new wave appears to be through'" [...]
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  Posted: December 22, 2008, 5:06pm EST
  

• Jury finds three guilty in KPMG tax shelter case

  A federal jury has found two former KPMG executives and a tax lawyer guilty of multiple accounts of tax evasion and acquitted a former KPMG partner in a case involving the creation and sale of tax shelters to wealthy Americans.
  
  The government's high-profile case suffered many setbacks, including the' [...]
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  Posted: December 18, 2008, 3:01pm EST
  

• IRS commissioner highlights agency enforcement priorities

  Excerpts from remarks by IRS Commissioner Douglas Schulman at the George Washington University International Tax Conference, Dec. 8, 2008:
  
  "U.S.-based corporations more than tripled their foreign profits between 1994 and 2004, rising from $89 billion to $298 billion – with 58 percent of that profit earned in low" [...]
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  Posted: December 09, 2008, 3:32pm EST
  

• UBS clients consider admitting tax evasion to avoid criminal prosecution

  Wealthy clients of Swiss bank UBS AG are seeking amnesty through an Internal Revenue Service voluntary disclosure program that allows U.S. citizens to avoid criminal prosecution if they acknowledge tax evasion and agree to pay taxes and penalties, according to The Wall Street Journal.
  
  "The developments amount to a" [...]
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  Posted: November 24, 2008, 1:04pm EST
  

• AIG challenges IRS on tax credit for cross-border financing transactions

  American International Group Inc. reported in a securities filing this week that it is pursuing a tax refund from the IRS in a case involving $329 million for "the disallowance of foreign tax credits associated with cross-border financing transactions," The Wall Street Journal said.

  Cross-border financing transactions allow companies with overseas [...]

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  Posted: November 14, 2008, 1:45pm EST
  

• IRS study finds big gap between corporate tax returns and book income

  The Internal Revenue Service found in a recent study that U.S. companies paid federal income taxes on their reported U.S. profits at a rate of 25.3% during 2005 -- far less than the 35% statutory rate, The Wall Street Journal reported today.
  
  The information about tax rates was [...]
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  Posted: November 13, 2008, 2:06pm EST
  

• Senior UBS official indicted in tax-dodge case

  U.S. prosecutors have charged one of the highest ranking officials at international banking giant UBS with setting up a system to help about 20,000 wealthy clients hide about $20 billion in assets from U.S. tax authorities.
  
  The indictment against Raoul Weil was filed in U.S. District Court in [...]
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  Posted: November 13, 2008, 1:18pm EST
  

• Indy 500 champion Castroneves indicted on income tax fraud

  Helio Castroneves, a two-time winner of the Indianapolis 500, was indicted by a grand jury today on charges of income tax fraud conspiracy and with six separate counts of income tax evasion for tax years 1999 through 2004, the Justice Department announced today.
  
  The indictment said one way Castroneves-- [...]
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  Posted: October 02, 2008, 4:08pm EDT
  

• Lead defendant in $60 million tax fraud case sentenced to 18 years

  A founder and executive director of the now-defunct Aegis Co., which marketed and sold sham domestic and foreign trust packages to hundreds of wealthy U.S. clients, was sentenced to 18 years in prison.
  
  The company official, Michael A. Vallone, and five co-defendants were convicted in May of participating in [...]
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  Posted: October 02, 2008, 12:09pm EDT
  

• Lawyer pleads guilty to charges related to setting up tax shelters

  An attorney with the law firm Arnold & Porter pleaded guilty today to criminal tax fraud charges related to the design, marketing and implementing of tax shelters as a way for rich clients to avoid taxes, the Justice Department said.
  
  The lawyer, Peter Cinquegrani, admitted in court that he [...]
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  Posted: September 11, 2008, 5:41pm EDT
  

• IRS Whistleblower Office inundated with claims

  The Internal Revenue Service has received more than 600 reports of tax violations from whistleblowers since the Whistleblower Office was established last year, Tax Notes Today reported Sept. 2.
  
  The Whistleblower Office so far has pursued 80 "high-value" cases out of those whistleblower claims, the trade publication says.
  
  [...]
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  Posted: September 08, 2008, 1:58pm EDT
  

• Many corporations don't pay taxes, government report finds

  Almost one-fourth of large corporations don't pay federal income taxes in a given year and roughly 60 percent of all corporations studied reported no federal income-tax liability, according to a study by the U.S. General Accounting Office.
  
  The report, requested by the U.S. Senate Finance Committee, is entitled, [...]
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  Posted: August 13, 2008, 2:29pm EDT
  

• IHT op-ed advocates whistleblower programs overseas

  Phillips & Cohen attorney Erika A. Kelton argues in today's International Herald Tribune that other countries would be wise to follow the example of the U.S. and offer whistleblowers a reward for information that results in the recovery of tax revenues.
  
  "Other governments elsewhere are beginning to'" [...]
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  Posted: August 08, 2008, 3:15pm EDT
  

• World's richest tax cheats

  With attention focused on European and U.S. investigations of individuals suspected of dodging taxes by hiding assets in Liechtenstein, Forbes magazine has compiled a list of the the world's richest tax cheats.
  
  "To be included, an individual had to be convicted of tax evasion, or had to accept'" [...]
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  Posted: July 18, 2008, 1:04pm EDT
  

• UBS apologizes, promises not to help U.S. residents with off-shore banking services

  In an effort to repair UBS's damaged reputation, a senior executive of the Swiss bank apologized for any misconduct by the bank that might have occurred in helping wealthy Americans avoid taxes through off-shore accounts and said the bank would no longer offer off-shore banking services to U.S. residents.
  [...]
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  Posted: July 18, 2008, 11:55am EDT
  

• Senate investigation finds offshore tax evasion costs U.S. $100 billion annually

  A Senate subcommittee investigation released yesterday reports that the U.S. is losing $100 billion annually due to offshore tax evasion.
  
  The report, by the Senate Permanent Subcommittee on Investigation, describes how Swiss bank UBS and LGT, owned by the royal family of Liechtenstein, helped wealthy individuals avoid U.S. taxes. [...]
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  Posted: July 17, 2008, 2:24pm EDT
  

• IRS to tighten rules on foreign banks and U.S. investors

  The Internal Revenue Service soon will require foreign banks in its "Qualified Intermediary" program to determine whether their clients are U.S. investors hiding behind foreign shell companies to improperly reduce tax rates or to avoid paying taxes, The New York Times reported today.
  
  If they are, the newspaper [...]
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  Posted: July 15, 2008, 3:13pm EDT
  

• Former IRS informant now subject of complaint by another tax informant

  A Miami-based newsletter is reporting that the Internal Revenue Service has opened up a new investigation into a former Cayman Islands-based banker-turned-informant after a one-time partner filed a claim under the IRS's informant reward program alleging tax fraud.
  
  "Offshore Alert" says that the former partner also [...]
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  Posted: July 08, 2008, 1:25pm EDT
  

• Amazon's decision on sales tax brings scrutiny

  A Wall Street Journal columnist today examines Amazon's strategy to avoid collecting sales tax in eight states, reporting that several tax experts say the bookseller's legal case appears to be weak.
  
  "Despite operating hundreds of thousands of square feet of distribution facilities in the eight states, Amazon says [...]
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  Posted: June 25, 2008, 12:52pm EDT
  

• Court decision favoring tax shelter is an aberration, IRS official says

  A recent court decision rejected an argument by the Internal Revenue Service that the defendant had invested in an improper tax shelter, but as a Wall Street Journal columnist says, "Don't rush into that tax shelter just yet."

  The Journal's Tax Report surmises that:

  Many investors battling the Internal Revenue [...]

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  Posted: June 04, 2008, 2:47pm EDT
  

• Former USB executive helping IRS with tax fraud investigation

  A former executive with Swiss bank UBS AG has agreed to plead guilty to tax fraud and cooperate with the U.S. government's investigation of wealthy individuals evading taxes with UBS help.
  
  He is expected to provide the government with the names of his U.S. clients.
  
  "UBS frequently [...]
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  Posted: May 30, 2008, 2:18pm EDT
  

• IRS investigates Rabobank, Newell transactions

  The Internal Revenue Service is investigating a whistleblower's allegations that Rabobank Group engaged in transactions with Newell Rubbermaid Inc. and other U.S. companies that were solely designed for the U.S companies to avoid taxes, the Wall Street Journal reported.
  
  The Journal said Newell sold accounts receivable at a [...]
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  Posted: May 30, 2008, 1:50pm EDT
  

• U.S. cracks down on tax avoidance by former citizens

  Congress has passed a law that will tax the assets of those who renounce their citizenship as if they were selling those assets and will require U.S. heirs to pay taxes on any assets left to them by ex-citizens.
  
  "The new taxes are included in legislation providing tax [...]
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  Posted: May 28, 2008, 2:35pm EDT
  

• Abusive tax shelters mutate into other forms

  Forbes.com has posted an excellent piece warning that banned tax shelters still are being promoted and so are are variations of abusive tax shelters.
  
  The column notes that "smaller firms, independent CPAs, lawyers and insurance salesmen continue to flog new—and old—shelter mutations to business owners and the successfully [...]
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  Posted: May 28, 2008, 10:13am EDT
  

• Tax-exempt status of nonprofits is challenged

  A story in today's New York Times looks at the issue of whether nonprofit institutions deserve tax-exempt status when they are charging fees and selling products and services.
  
  "In a ruling last December that sent tremors through the not-for-profit world, the Minnesota Supreme Court said a small nonprofit [...]
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  Posted: May 26, 2008, 10:37am EDT
  

• Offshore-account holders struggle over tough choices

  Facing an intensified government crackdown on offshore bank accounts, people who use those accounts to illegally hide their income are struggling over whether and how to turn themselves in, reports The Wall Street Journal.
  
  

  Lawyers advising tax dodgers are saying their clients are struggling to decide among several [...]

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  Posted: May 21, 2008, 12:22pm EDT
  

• Tax court criticizes IRS attorneys for tax shelter case

  The U.S. Tax Court in a recent decision rebuked the Internal Revenue Service for its handling of a large group of tax shelter cases in the late 1980s, saying the IRS had committed fraud on the court.
  
  The tax court decision involved the so-called "Kersting tax shelter [...]
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  Posted: May 09, 2008, 10:26am EDT