Have You or a Loved One Been Hiding Assets Overseas? UPDATED

Eat the Rich

The New York Times is reporting that as part of the recent information exchange agreement between the U.S. and Switzerland, UBS will ultimately hand over the names and account details of close to 5,000 wealthy American citizens suspected of tax avoidance. According to the Times, Switzerland has 370 days to examine the accounts of some 4,450 clients before turning the information over to the IRS and DOJ. Moreover, the agreement allows the Swiss government to work with other Swiss financial institutions to disclose the identities of other Americans suspected of hiding money offshore.

If so, Uncle Sam and his associates at the Internal Revenue Service (IRS) and the Department of Justice (DOJ) would like to talk to you. BNA (subscription required) is reporting this afternoon that the government is investigating 150 individuals suspected of concealing income and assets in the Swiss bank UBS.

Rumors had been circulating for some time about whether the Swiss government would come to terms with U.S. demands that UBS turn over information on clients suspected of tax avoidance. On Aug. 12, Douglas Shulman, Commissioner of the IRS, announced that the U.S. and Swiss governments had reached an agreement. In a court document filed today, acting U.S. Attorney Jeffrey Sloman revealed that Bradley Birkenfeld, a convicted former UBS banker-turned federal witness, supplied the government with the names of the 150 individuals. Wealthy individuals Birkenfeld ostensibly conspired with to hide money, the crime he was recently convicted of. With the new information exchange agreement, the U.S. government can now obtain the financial records of those individuals from UBS.

Some commentators have bemoaned this agreement as the end of secret accounts, claiming that the rich need to hide their assets for various reasons. In the end, however, these reasons fail to stand up to scrutiny. I share the opinion of the bloggers at the Tax Justice Network, who, while opining on the information exchange agreement between the U.S. and Switzerland, argued that this should be the start of a larger push for tax transparency:

Banking secrecy, trust secrecy, non-disclosure of corporate ownership, accounting opacity, weak information exchange processes: all must be swept aside for once and for all. This is just the beginning of the end of the tax havens . . .

Let the sunshine in.

Image by Flickr user Allie_Caulfield used under a Creative Commons license.

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