- Days left
Liechtenstein has long been thought of as a country which is a tax haven for those who wanted to avoid paying U.S. income taxes. And now, a former banker with UBS, a Swiss bank with a license to do business in the United States, says employees were trained on helping customers avoid U.S. tax laws. Bradley Birkenfeld has pleaded guilty to tax evasion in the U.S. and is helping federal prosecutors investigate banking practices.

It is alleged that UBS Bank helped at least 19,000 U.S. consumers to create "undeclared" bank accounts in Liechtenstein, which hid $18 billion in assets from the Internal Revenue Service.

Senator Carl Levin (D-MI) is head of a Senate committee that held a hearing about this issue today. He released a list of "secrecy tricks" to the media, which include some of the following tactics to help hide assets: give clients code names, use pay phones instead of business phones, create undeclared accounts, transfer companies to cover tracks, use foreign shell companies, create fake charitable trusts, use anonymous wire transfers, disguise business trips, and shred mail.
It is alleged that UBS violated U.S. banking laws by providing services it was not licensed to provide and by misusing Swiss bank secrecy laws. UBS is being investigated by the IRS, FBI, and Securities and Exchange Commission. This could get very interesting. It's already sounding mighty "cloak and dagger" with former employee Birkenfeld telling a story about buying diamonds with a client's Swiss bank funds and smuggling them into the United States in a toothpaste tube.

I'm not a fan of income taxes, and will do anything legal to reduce my tax burden as much as possible. But if I have to follow the laws, so should everyone else. Using foreign laws and tax havens to avoid U.S. taxes is wrong, and if UBS is actively helping customers to do just that, they need to be stopped and punished.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

TurboTax Articles

Employer Sponsored Health Coverage Explained

The Affordable Care Act, also known as Obamacare, is simpler than some people may give it credit for. The basic rule to remember is that everyone must carry Minimum Essential Coverage (MEC) or pay a penalty. Employers with 50 full-time employees or more are obligated to sponsor plans for their workers to help them meet this requirement.

How to Report RSUs or Stock Grants on Your Tax Return

Restricted stock units (RSUs) and stock grants are often used by companies to reward their employees with an investment in the company rather than with cash. As the name implies, RSUs have rules as to when they can be sold. Stock grants often carry restrictions as well. How your stock grant is delivered to you, and whether or not it is vested, are the key factors when determining tax treatment.

What is a Schedule Q Form?

The Internal Revenue Service (IRS) has two very different forms that go by the name Schedule Q. One of them is for people who participate in certain real estate investments; this is known as a Form 1066 Schedule Q. The other Schedule Q deals with employer benefit plans. It?s not something an individual taxpayer would normally have to deal with, though a small business owner might need it.

Incentive Stock Options

Some employers use Incentive Stock Options (ISOs) as a way to attract and retain employees. While ISOs can offer a valuable opportunity to participate in your company's growth and profits, there are tax implications you should be aware of. We'll help you understand ISOs and fill you in on important timetables that affect your tax liability, so you can optimize the value of your ISOs.

Add a Comment

*0 / 3000 Character Maximum