U.S. offshore tax amnesty yields big response: IRS

[pauldun170]

U.S. offshore tax amnesty yields big response: IRS
By Kim Dixon Kim Dixon 40 mins ago

WASHINGTON (Reuters) – Some 14,700 rich Americans worried about a U.S. government crackdown on offshore tax cheats came forward to participate in a tax amnesty program, the top U.S. tax official said on Tuesday.

Participation in the Internal Revenue Service's amnesty program was "unprecedented" and the final number was nearly double the agency's estimate in October, U.S. Internal Revenue Service Commissioner Douglas Shulman told reporters in a telephone briefing.

The IRS amnesty program, which ended in October, offered reduced penalties for wealthy Americans who voluntarily disclosed previously undeclared foreign bank accounts and assets. "We were flooded with people coming in the final days of the program," Shulman said.

"The IRS has never got anything like that in response to prior initiatives," said Barbara Kaplan, a lawyer for high net- worth clients in New York. "It's a little higher than I anticipated based on the pace of my own practice and the panic that was out there."

While agency officials were still analyzing the amount of offshore assets and bank accounts disclosed, Shulman said "we are talking about billions of dollars coming into the U.S. treasury" from the amnesty program.

Of the 14,700 newly disclosed accounts, Shulman said many involved bank accounts in Switzerland and Europe, but assets were also hidden in more than 70 countries.

"The whole game around bank secrecy, around offshore (tax) evasion is changing" because of pressure from the U.S. Justice Department and from international capital markets, he said.

At the center of the U.S. efforts to combat tax evasion abroad is a case against Swiss banking giant UBS AG, which led the bank to agree to reveal the names of 4,450 client accounts.

Shulman also said the outpouring of hidden offshore accounts does not affect in any way the obligation of UBS to turn over those American account-holder names. There had been some speculation that success in the amnesty program would cut the obligation of UBS to turn over accounts.

"Some have misinterpreted this," Shulman said.

Although the amnesty program has ended, Shulman encouraged Americans with hidden offshore assets to continue to come forward and talk with the IRS about them. "It will be much worse for them if we find them first," he said.

CRITERIA

The U.S. and Swiss governments also released on Tuesday the criteria it used to arrive at the 4,450 accounts that parties agreed UBS would eventually turn over to U.S. authorities.

The Swiss Justice Department said it would hand over the names of wealthy U.S. clients of UBS with accounts holding more than 1 million Swiss francs ($986,200) where there is a reasonable suspicion of tax fraud.

Accounts of a lesser size could come under the deal where there is a "scheme of lies" identified, according to the document.

It describes suspicious activity that could be interpreted as tax fraud including the use of debit cards, cell phones or wire transfers to hide accounts.

Shulman said the agreement will give the U.S. accounts it is most interested in -- those where taxpayers exhibited the most egregious behavior, those that would be hardest for the U.S. to identify and accounts with the largest holdings.

Submission of data to U.S. authorities applies to UBS accounts held between 2001 and 2008 by U.S. citizens.

(Reporting by Kim Dixon, with additional reporting by Jason Rhodes in Bern, Switzerland; Writing by Julie Vorman, Editing by Maureen Bavdek)

[Homeslice]

Not surprising.

Of course, the rich still have the gall to complain about being in a high tax bracket......Despite the fact that any rich person worth his salt finds ways to substantially reduce their effective tax rate.

[RACER X]

Originally Posted by Homeslice

Not surprising.

Of course, the rich still have the gall to complain about being in a high tax bracket......

and ?, just cuz they make more $ they somehow should have to pay more? do they use more social services then the comman guy?

[Homeslice]

Originally Posted by RACER X

and ?, just cuz they make more $ they somehow should have to pay more? do they use more social services then the comman guy?

would they have become rich if they didn't live in America? probably not.

Also, if law enforcement & national defense was provided by business instead of government, you can bet they'd bill each person according to their net worth. Not some kind of "flat rate"

[shmike]

Originally Posted by Homeslice

Not surprising.

Of course, the rich still have the gall to complain about being in a high tax bracket......Despite the fact that any rich person worth his salt finds ways to substantially reduce their effective tax rate.

You don't have to be rich to be smart.

ANY person worth their salt finds ways to reduce their effective tax rate.

Why wouldn't you?

[Homeslice]

Originally Posted by shmike

You don't have to be rich to be smart.

ANY person worth their salt finds ways to reduce their effective tax rate.

Why wouldn't you?

But I wouldn't sit around complaining about having a 39% tax rate when in fact after all my creative deductions and shelters I ended up paying only 22%.

[shmike]

Originally Posted by Homeslice

But I wouldn't sit around complaining about having a 39% tax rate when in fact after all my creative deductions and shelters I ended up paying only 22%.

I'd complain about paying 39% when the top rate is only 35%.

What's funny is that the people with the largest differences between their marginal rate and their effective rate usually aren't what you'd call rich.

[RACER X]

Originally Posted by Homeslice

But I wouldn't sit around complaining about having a 39% tax rate when in fact after all my creative deductions and shelters I ended up paying only 22%.

i'd bitch no matter my rate if i paid $100k in taxes vs joe blow paying nothing.

[Smittie61984]

Originally Posted by Homeslice

would they have become rich if they didn't live in America? probably not.

What? There aren't any rich people in England or the rest of the world?

Why did the artical have to start out with "14,700 RICH Americans"? That'd be like starting an article out with "Socialist Democrats have..."

What's sad is these people came back out of fear and punishment and NOT because our tax system would reward their money coming in and providing jobs any other time.

[Homeslice]

Originally Posted by Smittie61984

What's sad is these people came back out of fear and punishment and NOT because our tax system would reward their money coming in and providing jobs any other time.

So now we should reward people for turning themselves in? Isn't amnesty enough?