Offshore tax evasion is one of the major issues that has faced Internal Revenue Service (IRS) in the United States. This issue has had considerable negative impacts on economic growth and development of the United States with respect to taxation. The existence of multiple tax havens in Switzerland has facilitated massive tax evasion by the super-rich and companies. One of the most commonly used measures for tax avoidance or evasion is corporate profit-shifting. Individuals and companies continue to take advantage of tax havens i.e. countries that enable foreign individuals and companies a minimum tax liability, to engage in tax avoidance. Some of the major tax evasion incidents or cases include the UBS offshore tax evasion and Credit Suisse offshore tax evasion. This paper seeks to examine the history or development of Swiss bank cases and their impact on Swiss bank secrecy laws. This discussion also includes an evaluation of efforts undertaken by IRS to deal with offshore tax evasion through John Doe Summons’s and ODVI initiative as well as new FACTA rules.
Scope of Tax Evasion
As previously indicated, offshore tax evasion is a major issue in the United States, which has been facilitated by the existence and development of tax havens, particularly in Switzerland. While it is not illegal to establish offshore companies, individuals or businesses in the United States are required to report their global income. However, some businesses have capitalized on this in recent years by using their offshore intermediaries to protect them through hiding wealth or engaging in suspicious transactions in the tax havens (Mauldin & Saunders, 2016). For instance, the Panama Papers Scandal highlighted the extent with which individuals and businesses capitalize on the establishment of offshore companies in tax havens to engage in tax avoidance. The scandal implicated 140 public figures, celebrities, and executives worldwide to overseas assets in offshore tax havens. Some of these overseas assets are situated in different countries...
References
Emmenegger, P. (2014, May). “A Nut Too Hard to Crack”: Swiss Banking Secrecy and the International Campaign for Automatic Exchange of Information in Tax Matters. Retrieved May 30, 2018, from https://www.alexandria.unisg.ch/231925/1/A_Nut_Too_Hard_To_Crack_Emmenegger.pdf
Grossman, A., Letzing, J. & Barrett, D. (2014, May 19). Credit Suisse Pleads Guilty in Criminal Tax Case. The Wall Street Journal. Retrieved from https://www.wsj.com/articles/credit-suisse-top-brass-dodge-tax-evasion-bullet-1400505829
Henning, P.J. (2010, February 3). What’s Next for Swiss Bank Secrecy? The Wall Street Journal. Retrieved from https://dealbook.nytimes.com/2010/02/03/whats-next-for-swiss-bank-secrecy/
Lee, M.D. (2016, May 9). Today’s Panama Papers Release May Require Immediate Action to Mitigate Risk of Criminal Prosecution. Retrieved May 30, 2018, from https://taxcontroversywatch.com/category/offshore-voluntary-disclosure-initiative-ovdi/
Mauldin, W. & Saunders, L. (2016, April 5). The Panama Papers Scandal. The Wall Street Journal. Retrieved from https://blogs.wsj.com/briefly/2016/04/05/the-panama-papers-scandal-at-a-glance/
Saunders, L. & Sidel, R. (2012, September 11). Whistleblower Gets $104 Million. The Wall Street Journal. Retrieved from https://www.wsj.com/articles/SB10000872396390444017504577645412614237708
The Economist. (2013, November 23). Uber-warehouses for the Ultra-Rich. The Economist. Retrieved from https://www.economist.com/briefing/2013/11/23/uber-warehouses-for-the-ultra-rich
Tax Avoidance vs. Tax Evasion The main objective of a tax advisor is to assist his/her clients avoid taxes as much as possible through within the confines of the law in order to avoid crossing the line into tax evasion. In this case, the tax advisor guides his/her clients based on the law regarding tax avoidance and tax evasion. This paper focuses on comparing the concepts of tax avoidance and tax
Soyoung Kayla Kim Law and Economics Economic Analysis of Tax Evasion The taxation system in the United States is highly complex and growing more so each year, with a mass of different types of taxes. The issue of tax reform arises in every election season in the United States as politicians try to reassure as many voters as possible that they will pay the least possible amount of taxes (while still receiving all
Where individual taxpayers are concerned, the abstruseness and complexity of filing one's taxes can have the impact of obfuscating the legal imperatives driving one's filing obligations. This means that an individual may report his or her taxes inaccurately but without the intention to commit fraud. According to Daily, "Although auditors are trained to look for fraud, they do not routinely suspect it. They know the tax law is complex
With regard to the salaried people the federal tax system has improvised a method to flush the surplus spending funds in advance by the mandatory provision of requiring employers to withhold tax from payments in advance which on remitting will be computed as part of the total tax liability of the employee. This method of advance collection is an important feature said to be the pillar of the tax
S. domestic law, a U.S. citizen or resident (Non U.S. person) who is a beneficiary of a foreign retirement plan would be subjected to the existing U.S. income taxation on all of the income that is accrued in their foreign investment plans even though their income is never currently distributed per se to the beneficiary. This should be the case unless the foreign retirement plan accounts as the employee's trust
Flat Tax over the Current Tax Policy The focus of this paper is to demonstrate effectiveness of flat tax over the current tax rate. Presently, the U.S. government employs progressively tax law as the current tax policy. Under the current tax policy, the government increases taxes with increase in income. Analysis of the current tax policy reveals that the tax system is very complicated to understand because corporate organizations face multiple
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now