We lose $100 BILLION every year in uncollected taxes due to income sheltered off shore.

[JohnWxy]

This is link to a file of the opening remarks by Senator Carl Levin and testimony made to the committee investigating

Note in 10 years the $100 Billion per year would result in increased revenues of $1 Trillion or about two thirds of the program cuts the Congressional 'Super' committee is charged with coming up with!

http://hsgac.senate.gov/public/_files/OPENINGCARLLEVINMarch409Hrg0.pdf">TAX HAVEN BANKS AND U.S. TAX COMPLIANCE

Each year, the United States loses an estimated $100 billion from U.S. taxpayers using
offshore tax schemes to dodge their U.S. tax obligations. Those offshore shenanigans cheat
honest U.S. taxpayers who pay their fair share and rob the U.S. Treasury of funds needed for the
operations of our government.

This Subcommittee has dedicated significant effort to combating offshore tax abuse.
We’ve exposed some of the facilitators – the lawyers, accountants, broker-dealers, company
formation agents, trust administrators, and others that help clients dodge their U.S. tax
obligations. We’ve exposed some of the schemes, such as mass marketed tax shelters peddled as
investment strategies, networks of offshore trusts and corporations with hidden assets, phony
offshore stock portfolios used to offset real income, and deceptive offshore transactions used to
recast taxable income as allegedly tax free payments.

~~
~~

First, let’s examine the UBS case. UBS is headquartered in Switzerland and is one of the
largest banks in the world. During our July hearing, UBS admitted publicly for the first time that
an estimated 19,000 U.S. clients had opened UBS accounts in Switzerland with nearly $18
billion in assets that were not disclosed to the U.S. Internal Revenue Service (IRS).
Since then, new evidence suggests that there may be far more than 19,000 U.S. clients
with hidden accounts at that Swiss bank. A 2004 UBS internal report, which was introduced in
court by the United States and we’ve marked as Hearing Exhibit 12, analyzes the U.S. client
accounts opened in Switzerland.

It states:

“The number of account relationships in WM&BB in Switzerland with US residents
where the account holder has not provided a W-9 is approximately 52,000 (representing
CHF 17 billion” – which means 17 billion Swiss francs” -- in assets).”

“WM&BB” stands for the Wealth Management and Business Banking group at UBS in
Switzerland. A “W-9” is the form that is supposed to be filed with the bank by an accountholder
who is a U.S. person. The reference to “account relationships” leaves it unclear whether UBS
had 19,000 U.S. clients, as UBS estimated in July, many of whom may have had multiple
accounts; or whether it had 52,000 U.S. clients; or some number in between. We hope to clear
up that issue today.

UBS also admitted during our July hearing that, for years, its Swiss bankers had made a
practice of traveling to the United States to search out new clients and service existing clients,
even though its Swiss bankers were not licensed to provide banking or securities services while
in the United States.

~~
~~

Despite those admitted facts, UBS refuses to turn over the vast majority of the names of
the U.S. persons with whom they schemed to defraud the United States. UBS and Switzerland
justify that refusal by invoking Swiss secrecy laws. They say the United States should use the
tax treaty process instead, but that won’t help, because the Swiss have interpreted the treaty to
deny information requests about potential tax cheats whose names are unknown. And why are
those names unknown? Swiss secrecy laws.

~~
~~

As a first step, Congress should enact the Stop Tax Haven Abuse Act, S. 506, which I
and my colleagues introduced earlier this week and which the Obama Administration endorsed
yesterday through Treasury Secretary Geithner.

This bill offers powerful new tools to detect and stop offshore tax offenders, including by
ending the Ugland House scam that allows phony offshore shell corporations operated from the
United States to dodge U.S. taxes, permitting the establishment of legal presumptions that can be
used to combat offshore secrecy, authorizing special measures against financial institutions or
countries that impede U.S. tax enforcement, requiring third-party disclosures of offshore
transactions, extending the deadline for assessing taxes in offshore cases from 3 to 6 years, and
closing a raft of offshore tax loopholes.

There are also actions that the Obama Administration can take to clamp down on offshore
tax abuses, without waiting for legislation. The Administration could, for example, establish a
special enforcement unit to handle the hundreds if not thousands of prosecutions likely to result
from the UBS case alone and to initiate proceedings against other tax haven banks. That
enforcement unit would send the message that the UBS tax scofflaws are not going to get off
scot free, and no tax haven bank account is free from risk.

The Administration could also become an active participant in ongoing international
efforts to penalize offshore jurisdictions that facilitate tax evasion. Efforts by the G20 group of
nations to coordinate action against offshore tax havens are gaining steam in anticipation of the
G20 meeting in April, but the United States has so far been largely silent. It is time for the
United States to become a leader, not a follower, in international efforts to develop a list of
uncooperative tax havens and to develop a toolbox of penalties to be imposed on those who
impede tax enforcement.

~~
~~

Offshore tax abuses are burning a $100 billion hole in the U.S. budget. While the Justice
Department and the IRS are to be commended for their creative and tenacious efforts in the UBS
case, no one should think for a moment that the offshore tax battle is over, even if the IRS wins
its lawsuit. Despite UBS’ being caught red-handed and admitting wrongdoing, the Swiss
Government is fighting the John Doe summons and defending Swiss secrecy. The president of
the Swiss Bankers Association, Konrad Hummler, told the press that, “The large majority of
foreign investors with money placed in Switzerland evade taxes,” but showed no regret that
Swiss financial institutions are facilitating that tax evasion – quite the contrary since tax evasion
is not a crime in Switzerland. And Switzerland is just one of 50 tax havens battling to keep
offshore secrecy laws in place.
(more)

Now, I don't know what has become of the Stop Tax Haven Abuse Act, S. 506, but in this Corporate Lobbyist Party impaired Congress, I doubt if it's gotten very far. This bill would not increase anybody's taxes. It is just intended to help enforce the current laws on the books - especially with regard to Buckaneer Banks like UBS!

[Cool Logic]

1. How can we "lose," what we does not posses and did not earn...?

[Bill USA]

3. If you pretend you don't understand simple English and insist on logic that is of your own creation

... you'll end up talking only to (or at least only being understood by) yourself (perhaps you got used to that a long time ago).

"Each year, the United States loses an estimated $100 billion from U.S. taxpayers using
offshore tax schemes to dodge their U.S. tax obligations. Those offshore shenanigans cheat
honest U.S. taxpayers who pay their fair share and rob the U.S. Treasury of funds needed for the
operations of our government."


... most of us do pay our taxes so that we can operate our Government. Those who get the benefits of living in the U.S. or making money in the U.S. should pay their fair share. This is simple, common sense principle. When I was a child I didn't realize that everything going on around me cost money to make happen. Somewhere along the line, I realized that people have to be paid to do their jobs .... I guess one could say that was when I became a grown-up. ;-)

[tropicanarose]

6. well said

[Cool Logic]

9. I have seen this allegation made before...

and in every case it was determined that the entity in question had paid its taxes--not to the US, but to the country to whom the taxes were actually owed.

Are you suggesting that these entities be subjected to double taxation?

[Bill USA]

11. I am not suggesting, I am stating, unequivocally, that enterprises foreign or domestically owned

that have earned income from sales in this country should pay U.S. income taxes on said earnings. If they are making money in the U.S. and are incorporated in another country whatever their tax situation is, is up to their management to figure out as to profitability and feasibility.


http://www.nytimes.com/2008/08/13/business/13tax.html#">Study Tallies Corporations Not Paying Income Tax - NYT

Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a report released Tuesday by the Government Accountability Office, the investigative arm of Congress.

The study, which is likely to add to a growing debate among politicians and policy experts over the contribution of businesses to Treasury coffers, did not identify the corporations or analyze why they had paid no taxes. It also did not say whether they had been operating properly within the tax code or illegally evading it.

The study covers 1.3 million corporations of all sizes, most of them small, with a collective $2.5 trillion in sales. It includes foreign corporations that do business in the United States.

Among foreign corporations, a slightly higher percentage, 68 percent, did not pay taxes during the period covered — compared with 66 percent for United States corporations. Even with these numbers, corporate tax receipts have risen sharply as a percentage of federal revenue in recent years.
(more)
------------------------------------------------------------------------------------------------------------------------------------------------------------------


Here is what the GAO report said: http://www.gao.gov/new.items/d08957.pdf#page=2&zoom=85%">Comparison of the Reported Tax Liabilities of Foreign- and U.S.-Controlled Corporations, 1998-2005

Note: (FCDC) = foreign-controlled domestic corporations
......(USCC) = U.S.-controlled corporations

"FCDCs reported lower tax liabilities than USCCs by most measures shown in this report. A greater percentage of large FCDCs reported no tax liability in a given year from 1998 through 2005. For all corporations, a higher percentage of FCDCs reported no tax liabilities than USCCs through 2001 but differences after 2001 were not statistically significant. Most large FCDCs and USCCs that reported no tax liability in 2005 also reported that they had no current-year income. A smaller proportion of these corporations had losses from prior years and tax credits that eliminated any tax liability. By another measure, large FCDCs were more likely to report no tax liability over multiple years than large USCCs. In 2005, comparisons of FCDCs and USCCs based on ratios of reported tax liabilities to gross receipts or total assets showed that FCDCs reported less tax than USCCs."


here's a table summarizing what they are saying: http://www.gao.gov/new.items/d08957.pdf#page=27&zoom=100%">Table 1: FCDCs and USCCs Reporting No Tax Liability, Tax Years 1998 through 2005

[Bill USA]

12. the GAO did the only study of this tax dodgeing I know of. I don't know how they would be able to

establish that the companies in question paid taxes in another country.

can you document your statement?: "in every case it was determined that the entity in question had paid its taxes--not to the US, but to the country to whom the taxes were actually owed"....a link would be nice too.

[Bill USA]

15. GE paid zero income taxes for 2010 - NYT

http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=1">G.E.’s Strategies Let It Avoid Taxes Altogether - NYT

The company reported worldwide profits of $14.2 billion (for 2010_B USA), and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

~~
~~

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.
(more)

[hue]

17. the $$$ were earned in the US and transferred abroad to locations

where they were not reported as yearly income tax. Dividends and other incomes accrued in those "safe havens".

Investigations of this sort are increasing since Obama has become president. In fact someone I work with is now under
investigation for this very fraud. He claims it is all just a mistake & he didn't know what was happening-->similar to your
demeanor. The stupidity you seem to convey and that the person being investigated would like us to believe will not protect him
from being prosecuted.

[DCKit]

2. Any unreported deposit into a Swiss account should be treated as money-laundering...

with 100% forfiture of all assets and time in federal prison. IRS collections of taxes due would go through the roof.

[Bill USA]

4. Unfortunately, if UBS doesn't report it to us, it's hard to devine it's existence.

Sometimes IRS can use change in net worth to devine the existence of income but it's not always practicable.

[saras]

10. It's perfectly practical if we use the NSA. Money transfers are ordinary digital data..

But financial fraud isn't a priority of our government.

[Bill USA]

13. yes, it's technically feasible but there is a little matter of the Government not being able to

spy on you to rummage around looking for the possible commission of a crime (unless a crime is highly likely to have been committed in which case they must obtain a search warrant). The big exception is if they suspect you of terrorist activities - in which case all rights to privacy evaporate pursuant to The Patriot Act.

[Bill USA]

14. I'm going to look into the Stop Tax Haven Abuse Act, S. 506 - see how it's coming along. Maybe if

people start sending emails on this matter more attention would be paid to it. i know Senator Levin has been trying to do something about it (he might appreciate some interest in this bill from the electorate). Note that your emails inquiring as to the status of this bill should go to your own Senators.

http://www.congress.org">Congress.org

[cutlassmama]

8. +1

[tropicanarose]

5. Outrageous.........I don't understand why this can't be better controlled. This is criminal

[thelordofhell]

7. And EVERY republican wants to put a "tax holiday" on bringing the money back in

Fucking......crooks

[midnight]

16. That's a lot of money.