Offshore tax-dodger dragnet widens with U.S.-Swiss bank deal: lawyers

Tue Sep 3, 2013 5:31pm EDT
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By Patrick Temple-West and Kevin Drawbaugh

WASHINGTON (Reuters) - The U.S. government, stepping up its pursuit of American offshore tax dodgers worldwide, stands to gather an abundance of leads through a bank information-sharing deal between the United States and Switzerland, tax lawyers said on Tuesday.

The pact last week marked a turning point in a lengthy dispute between Bern and Washington, and opened the door for about 100 second-tier Swiss banks to turn over information about American account holders to the U.S. government.

Part of the deal requires Swiss banks to tell Washington about so-called leavers, or U.S. customers who shift assets to other countries. This disclosure will be a powerful tool for U.S. authorities, who started turning up the heat on offshore tax avoidance in 2008.

U.S. authorities are "clearly chasing the folks who fled Switzerland," said Josh Ungerman, a partner with law firm Meadows, Collier, Reed, Cousins, Crouch & Ungerman LLP.

In a statement last week on the pact, the U.S. Justice Department noted that its tax enforcement activities are global and have included actions undertaken in India, Luxembourg, Israel and Caribbean countries.

The United States for five years has been aggressively pursuing U.S. citizens who have been hiding assets abroad to evade taxes. So far, Switzerland has been the main focus of the chase, which includes ongoing criminal investigations of 14 big Swiss banks.

But lawyers said the scope of the crackdown could widen.

"Moving your money around to avoid disclosure is clear evidence of criminal intent," said Scott Michel, a tax lawyer with Caplin & Drysdale who has helped about 1,000 U.S. clients voluntarily disclose to the Internal Revenue Service (IRS) previously unreported money abroad.   Continued...

Patrick Odier, Chairman of the Swiss Bankers Association and Senior Partner of private bank Lombard Odier (LODH) gestures during the Capital Market Forum in Zurich September 3, 2012. REUTERS/Michael Buholzer