Entries in Offshore Accounts (3)


Super-Rich Hide $21 Trillion in Secret Tax Havens, Says Tax Justice Network

Adam Gault/Thinkstock(NEW YORK) -- The super-rich are hiding at least $21 trillion in accounts outside their home countries, according to a report by an activist group called the Tax Justice Network.

The wealth hidden in these tax shelters is the equivalent of the United States and Japanese economies combined, according to the report titled “The Price of Offshore Revisited.”

“The hidden offshore sector is large enough to make a significant difference to all or conventional measures of inequality, ” wrote the lead author, James S. Henry, a former McKinsey & Co. chief economist.

“Since most of the missing financial wealth belongs to a tiny elite, the impact is staggering. For most countries, global financial inequality is not only much greater than we suspected, but it has been growing much faster,” he said.

Daniel N. Shaviro, a professor of taxation at New York University, told ABC News a lot of what’s happening is tax fraud.  He said the report highlights that there are wealthy people who don’t want to pay taxes -- and their home countries don’t have enforcement mechanisms in place, so they can get away with it.

In a list of the top 20 countries experiencing “global flight wealth,” China ranks as number one with $1.19 trillion. It is followed by Russia, Korea, Brazil, and Kuwait.

“Often these countries in general have not been rich for as long as the U.S. or England so they may not have both the rule of law and their enforcements may not be as well developed,” said Shaviro.

Using data from the World Bank, the IMF, the United Nations, central banks, the Bank for International Settlements and other sources,  the report said 100,000 people worldwide were responsible for $9.8 trillion in wealth held offshore.

And who managed the money?

According to the study, UBS, Credit Suisse and Goldman Sachs are the top three private banks handling offshore accounts for the super-rich.

“It turns out that this offshore sector -- which specializes in tax dodging -- is basically designed and operated, not by shady no-name banks located in sultry islands, but by the world’s largest private banks, law firms, accounting firms, headquartered in First World capitals like London, New York and Geneva,” wrote Henry.

Copyright 2012 ABC News Radio


IRS: 12,000 Tax Cheats Have Come Forward

Comstock Images/Thinkstock(WASHINGTON) -- At least 12,000 tax cheats with offshore accounts have come forward under an amnesty program that just ended, coughing up $500 million in interest, the IRS says.

“The recently completed offshore program pushed the total number of voluntary disclosures up to 30,000 since 2009,” the agency said in a statement.

The 2009 program raised $2.2 billion, but the latest amnesty has yet to collect penalties, which will add hundreds of millions more to the total.

“By any measure, we are in the middle of an unprecedented period for our global international tax enforcement efforts,” IRS Commissioner Doug Shulman said in a statement.  “We have pierced international bank secrecy laws, and we are making a serious dent in offshore tax evasion.”

The IRS and the Justice Department have been strong-arming banks worldwide to give up names of their U.S. clients who have offshore accounts, especially banks that do business here.  Swiss bank UBS signed a deal two years ago with the United States on offshore accounts and paid $780 million.

Clients of UBS and other banks are also being prosecuted, although the IRS hasn’t released any details of the efforts.  Reports indicate that perhaps a dozen banks might be prosecuted for tens of thousands of secret accounts held by U.S. citizens.

News of the deals with foreign banks likely led to so many people coming forward under this second program, avoiding criminal charges.

According to the IRS statement Thursday, new figures showed that from the 2009 offshore program, the IRS has $2.2 billion in hand from taxes, interest and penalties, representing about 80 percent of the 2009 cases that have closed.  The cases covered bank accounts in 140 countries.

“This dollar figure will grow in the months ahead,” Shulman said.  “But just as importantly, we have changed the risk calculus.  Americans now understand that if they try to hide assets overseas, the chances of being caught continue to increase.”

It’s unclear whether the agency will offer a third program for tax cheats to come clean.

Copyright 2011 ABC News Radio


IRS Establishes Initiative for Taxpayers Hiding Assets Offshore

Photo Courtesy - Getty Images(WASHINGTON) -- The Internal Revenue Service announced a new voluntary disclosure initiative intended to "bring offshore money back into the U.S. tax system" allowing people with undisclosed income hidden overseas to "get current with their taxes," the agency said in a statement Tuesday.

According to the limited-time offer, Americans who have been hiding money in offshore accounts have until August to fess up and avoid jail time.  The initiative would require those who come forward to pay back taxes, interest and reduced penalties. 

IRS Commissioner Doug Shulman said the risk to individuals hiding assets offshore is increasing due to new laws forcing foreign banks to hand over information on American depositors.

Taxpayers have until the Aug. 31 deadline to file "all original and amended tax returns," the agency stated.

Copyright 2011 ABC News Radio

ABC News Radio