It’s About Time

Since I do not have a secret Swiss bank account to “store” my “wealth,” (I put wealth in quotes because I am broke law/business student, and I’ll let you figure out why I put store in quotes) I am happy to hear that the IRS is finally, and successfully, cracking down on the Swiss institutions that have been aiding the wealthiest Americans evade taxes for many years. According to the Wall Street Journal, Credit Suisse Group AG said on Tuesday the 8th that it would hand over the names of bank clients suspected of evading U.S. taxes, in response to a request from the IRS. The Journal went on to say that in light of this news and UBS’s settlement with the IRS two years ago concerning similar matters, more Swiss institutions will likely handover the names of individuals suspected of tax evasion to the IRS at their request.

In this economy where there exists a serious concern about generating enough tax revenues to fund our government, I support the IRS’s decision to vigorously pursue all bastions of potential revenues. I do not know why it has taken the IRS so many years to finally go after the Swiss tax shelters. Maybe they thought they wouldn’t be successful in the past? Or maybe it took an impetus like the financial crisis and subsequent recession to push the IRS to finally go after the seemingly impenetrable Swiss banks? No matter, I am happy that no longer will Americans who intentionally (mens rea) move funds to Swiss banks to evade taxes get away with such practice. It is immoral, unfair, and illegal. I am even happier to hear that the institutions that help individuals evade taxes will get their just desert.

After reading this article, I can hear my Dad’s voice saying “Nail the b*stards,” and I cannot help but feel the same way.

 

Credit Suisse to Name Names

 

3 comments

  1. Immoral, unfair, and illegal? Sounds like you are describing the current tax code. The truth is that there is nothing unfair or immoral in taking steps to reduce your federal income tax obligation and it takes more than intent to make something illegal. The fact that our current tax code allows for and encourages manipulation is exactly why it needs to change. If the tax code encouraged taking risks and making investments in U.S. markets, our economy wouldn’t be in the shape it’s currently in and you’d have a job offer. At some point our representatives will realize that there is an alternative to the current system that will help the economy and support government sponsored programs. Until that happens the ultra-wealthy will continue to pay people like you to legally and morally decrease their tax burden.

  2. I disagree, Mike. There is a big difference between reducing your tax liability through some creative but legal means, and committing tax evasion or fraud. Stashing money in a Swiss tax shelter without reporting the account(s) on the TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, the “FBAR,” available at http://www.irs.gov/pub/irs-pdf/f90221.pdf) is criminal tax evasion- plain and simple. I think you would be hard pressed to argue that willfully hiding money is a legitimate means of reducing tax liability.
    ________________________
    See 31 C.F.R. § 1010.350 (stating that every U.S. person who has a financial interest in or signature authority over foreign financial accounts must file the FBAR if the aggregate value of the foreign financial accounts exceeds $10,000); See also 26 U.S.C. § 7201 (stating that “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall…be guilty of a felony”).

  3. This post reminds me of a high school teacher of mine who once said that the United States is run by the extreme wealthy who live up high in the mountains because if the people saw how unfair the system really was, they would revolt. While I think such a view is extremely cynical, sadly I do not think that it that displaced from reality. In reading this post, my two main responses would have to be either it’s about time or even so it’s not going to matter. Though we like to think that the world runs on principles like fairness, it is hard to disregard those that say that money displaces all. In fact, the sad truth is that the reason why the IRS has likely waited so long to take action is because of tooth and nail opposition by the power elite. Moreover, while this step could be said to represent a large milestone, there is no doubt in my mind that the targets of this IRS movement will just find some other way to hide their wealth. Granted it is unfair and morally wrong, but is this just is the way the world is?

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