US Senate examines tax evasion involving Swiss, Liechtenstein banks
Swiss bank UBS and Liechtenstein's LGT have helped thousands of US citizens avoid paying taxes, a US Senate subcommittee alleged in hearings Thursday about offshore tax havens.
UBS held 19,000 accounts for US clients in Switzerland valued at 18 billion dollars, and at least 100 others worked with LGT in structuring their accounts to avoid disclosing funds to the US Internal Revenue Service, a Senate investigation found, the dpa reported.
UBS chief financial officer Mark Branson told the committee the bank would no longer offer offshore-banking services to US clients at branches outside the US.
A federal court cleared the path for an IRS investigation of UBS earlier this month. The bank has agreed to cooperate.
The court order authorized the IRS to serve a "John Doe" summons on the bank. The IRS uses such summons to obtain information about possible tax fraud by people whose identities are unknown. The John Doe summons approved by the court directs UBS to produce records revealing US taxpayers with accounts at UBS that have been kept from the IRS.
LGT rejected the Senate allegations in a statement released in Vaduz and said the information in the investigation was outdated and included data from before current regulations were in place. LGT declined to testify at the hearing, but said it had already cooperated with the Senate investigation.
"Tax havens are engaged in economic warfare against the United States, and the honest, hardworking American taxpayer is losing," Carl Levin, a Democrat who leads the Senate panel, said in a statement on the investigation. "The iron ring of secrecy around tax haven banks and their deceptive banking practices enable and encourage tax cheats to hide assets from the United States."
The law requires US taxpayers to report all financial accounts in a foreign country if the total value of the accounts exceeds 10,000 dollars at any time during the calendar year. A "willful failure" to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation, according to the Justice Department.