Tag Archive for tax evasion

Former Credit Suisse Banker Pleads Guilty

Josef Dörig, 72, of Switzerland, pleaded guilty on April 30th to conspiring to defraud the Internal Revenue Service (IRS) in connection with his work as the owner of Dorig Partner AG, a trust company in Switzerland.

In a statement of facts filed with the plea agreement, Dörig admitted that between 1997 and 2011, while owning and operating a trust company, he engaged in a wide-ranging conspiracy to aid and assist U.S. customers in evading their income taxes by concealing assets and income in secret bank accounts held in the names of sham entities at Credit Suisse.  In 1997, the Credit Suisse subsidiary spun off these sham entities into a trust company, Dorig Partner AG, owned and operated by Dorig, the Justice Department said. Read More

Written by | Posted in FATCA • International • IRS

So Where Does The Oft Cited $150 Billion Figure Of Offshore Evasion Come From?

Well known tax author and journalist Denis Kleinfeld suggests the following answer to this question.

The Congressional Research Service (CRS) provided a Memorandum of July 23, 2001 referencing an inquiry made by the House Majority Leader as to the method used by attorney Jack Blum to construct the estimate of $70 billion of illegal tax evasion losses due to tax havens. This figure was contained in Jack Blum’s Affidavit submitted in support of the government’s request from the federal court for a John Doe summons for records from MasterCard and American Express.

Dennis Kleinfeld states that, according to the CRS:* Read More

Written by | Posted in FATCA • International • OVDP • Tax Fraud/Evasion/Crimes

How Much Is Actually Lost Each Year To Offshore Noncompliance?

The Senate Subcommittee staff reported that: “According to the IRS, the current estimated annual U.S. tax gap is $450 billion, which represents the total amount of U.S. taxes owed but not paid on time, despite an overall tax compliance rate among American taxpayers of 83 percent. Contributing to that annual tax gap are offshore tax schemes responsible for lost tax revenues totaling an estimated $150 billion each year.”

To justify the reporting of the number of $150 billion a year of lost tax revenue due to “offshore tax schemes”, the Senate Report primarily cites its own investigatory reports and third party articles that refer to transfer pricing issues.  While transfer pricing regulations have been under scrutiny, at least by the Democrats, in the Senate, it is certainly not commonly held by those same Democrats that transfer pricing is illegal or constitutes an “offshore scheme”. Read More

Written by | Posted in FATCA • International • OVDP • Tax Fraud/Evasion/Crimes

Too Many FATCA Loopholes?

According to the 175-page bipartisan staff report FATCA’s implementing regulations have created multiple loopholes, without statutory basis, in the disclosure requirements.

Among other problems, the Senate Subcommittee stated that the FATCA regulatory loopholes will:

1. require disclosure of only the largest dollar accounts;
2. permit banks to ignore, in most cases, bank account information that is kept on paper rather than electronically;
3. allow banks to treat accounts opened by offshore shell entities as non-U.S. accounts Read More

Written by | Posted in FATCA • International • Tax Fraud/Evasion/Crimes

106 Swiss Banks Seek Non-Prosecution from US Justice Department

106 Swiss banks (of approximately 300 total) filed the requisite letter of intent to join the Program for Non-Prosecution Agreements or Non-Target Letters (the “Program“) by the December 31, 2013 deadline.  Renown attorney Jack Townsend reported on his blog on February 14th provided a list of 49 Swiss banks that had publicly announced the intention to submit the letter of intent, as well as each bank’s category for entry: six announced seeking category 4 status, eight for category 3, thirty-five for category 2.  106 was a large jump from the mid-December report by the international service of the Swiss Broadcasting Corporation (“SwissInfo”) that only a few had filed for non prosecution with the DOJ’s program (e.g. Migros Bank, Bank COOP, Valiant, Berner Kantonalbank and Vontobel).

What is the Program for Non-Prosecution Agreements or Non-Target Letters for Read More

Written by | Posted in FATCA • International • IRS • OVDP • Tax Fraud/Evasion/Crimes

10 Ways To Avoid Becoming A Guest of “Club Fed” For Tax Evasion

Contrary to popular belief, the IRS doesn’t want to throw you in jail. Criminal investigations consume a lot of resources, take time, and are expensive. For most taxpayers, a criminal investigation isn’t a first step, but rather the last step in a lengthy process to get you to resolve your tax debt. In other words, it’s rare that an agent will show up on your doorstep one day with cuffs in hand.

Additionally, while tax evasion and related charges are an important piece of the IRS Criminal Investigation (CI) charges, they’re not the whole kit and kaboodle. Often, criminal investigations are linked to other criminal activities like fraud, drug offenses, and money laundering. Need you forget Al Capone? When it comes to criminal activities, other federal agencies – like the Federal Bureau of Investigation and FINCEN – can pursue these Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

NOW Swiss Bank Information Can Be Disclosed To Foreign Tax Authorities WITHOUT Notice!

We previously posted “Your Swiss Bank Info Is Being Transferred To The US Government As We Speak!… This Is Not An April Fools Joke!” on Wednesday, April 2, 2014, where we discussed that The United States Justice Department has received 106 requests from Swiss entities to participate in a settlement program aimed at ending a long-running probe of tax-dodging by Americans using Swiss bank accounts according to a senior US official.

These banks will have to disclose a great deal of information about their American clients, even including some of their names by April 30, 2014!

To make matters worse for US tax dodgers… if that is even possible… Swiss Parliament has approved a legal amendment that tax evaders will not always have to be told if Switzerland Read More

Written by | Posted in FATCA • OVDP • Tax Fraud/Evasion/Crimes

Lauryn Hill – Out of Jail, But The IRS Keeps Hounding

Singer songwriter Lauryn Hill was thrown into jail for three months for tax evasion, with another three months of home confinement. This is all based upon her following some scheme by phony tax advisors claiming that she did not need to file and pay income taxes. Like many people, from physicians to celebrities, she fell prey to the tax protesters coaxes.

The IRS had a great time spending tens of millions of dollars prosecuting her but got incredible amounts of publicity to scare other people into filing their tax returns. That is the basis of our “voluntary” tax system. Without people being scared of being thrown in jail, the system would collapse.

Now, the IRS is using Lauryn Hill’s name to keep scaring taxpayers, just before the tax Read More

Written by | Posted in IRS • Tax Fraud/Evasion/Crimes

Think You Got Game? Try Solving A Criminal Tax Problem – Part V

Question # 5: Is anything else relevant?

a. The special agent should review any loan applications that Jack and Janet submitted to the bank. For example, did they buy their home with borrowed funds or outright in cash?

b. The special agent should investigate transactions that Jack and Janet had with their customers and suppliers. That might help make unreported business income a special items method as opposed to an indirect methods item. Because courts are more cynical of the indirect method, it usually draws more scrutiny from courts than the direct method.

See Part I, Part II, Part III and Part IV Read More

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Think You Got Game? Try Solving A Criminal Tax Problem – Part IV

Question # 4: What affirmative defenses might Jack and Janet assert?

See Part I, Part II, Part III, and Part V

a. Cash hoard defense: Jack and Janet had $ 16,000 lying around, which presumably funded some of their expenditures.

i. The government would counter that by asking, “When did you acquire that $ 16,000? Did you have such great years prior to 2004 that you wound up saving $ 16,000?”

ii. The government would want to look at what was going on with Jack and Janet financially. Did they have unpaid debts or did they file for bankruptcy? Both are inconsistent Read More

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Think You Got Game? Try Solving A Criminal Tax Problem – Part III

Question # 3: What holes do you perceive in the case and how should they be filled?

See Part I and Part II.

a. The government should check to see if the IRS issued Jack and Janet a 1099 for the dividends and for the sale of stock. If so, the special agent would need to determine who the 1099s were issued to and at what address. Were Jack and Janet living at that address at the time the 1099s were sent? There is a presumption of receipt if the government establishes that the 1099s were mailed to the correct address. What is that important? The receipt of 1099s by Jack and Janet would help the government prove willfulness. In Read More

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Think You Got Game? Try Solving A Criminal Tax Problem – Part II

Question #2: What theories of proof should be pursued?

Continued… See Part I, Part III, Part IV and Part V

a. This would be a case in which the government uses specific items or the direct method in some instances and indirect methods in other instances. For example, Jack received $ 2,000 in dividends in 2004, none of which he reported on his 2004 tax return. That is a specific item. The government’s argument is quite simple: “Got dividends? We see that you do. Were they reported on the return? It appears that they weren’t. That’s all we have to prove.” Of course, that is a bit of an exaggeration because the government must prove willfulness. Read More

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