The Feds and UBS Reach a Squeal of a Deal

If you can't wash it -- hide it, right? Generally lauded for its banking secrecy laws -- standards which have held for hundreds of years -- the Swiss and their accounts have been the "hider of last resort;" but according to the Associated Press, this may be about to change.

"The U.S. government and Swiss banking giant UBS AG have reached an agreement in a case seeking names of some 52,000 suspected American tax evaders with billions in secret Swiss accounts," but further details and stipulations will be released next week.

All sides -- the US (read IRS), UBS (UBS) and the Swiss government -- are "pleased," with Swiss Justice Minister Eveline Widmer-Schlumpf quoted as saying the agreement "is in the interests of both states."

I wonder what we're giving them in return for the names -- the names of all the hack-Swiss watch counterfeiters off Canal Street? Don't laugh -- that could work...

The IRS is in the belief that some 52,000 American clients are hiding upwards of $15 billion in secret accounts.

After months of negotiating, an agreement has been reached, but the details have yet to be signed in final form.

This isn't the first time UBS has been made to spill the beans. Earlier this year, they paid a $780 million penalty and turned in some 300 Americans evading taxes --which ironically, and coincidentally, is not a Swiss banking crime! (Go figure... so much for "integrity?")

Since then, hundreds of other holders have come forward under an amnesty program which allows the tax sinners to pay taxes and penalties but evade the threat of jail.

This amnesty ends September 23, 2009.

Comments

[ScroogeMcduck:]

If taxes in this country weren't so high we wouldn't have this problem.

Aug 12 05:14 PM

[ScroogeMcduck:]

This is what happens when your broke you start reaching down in the cracks of your sofa for loose change.

Aug 12 05:22 PM

[Jasper M:]

I advise all concerned to withhold judgment until the details are revealed. For example, while Tyler cites the goal of the original CASE was "52,000", the total in the final agreement is likely to be much, Much lower. In fact, the terms of the deal are likely to be mostly about what the Swiss courts will accept as evidence to justify coughing up names on a case-by-case basis.

And then, if I am not much mistaken, it all has to be retified by the referendum before the Swiss electorate. Any bets there . . . ?

Aug 12 05:31 PM

[Pink Panther:]

The first 300 Americans evading taxes were customers of the US branch of UBS, therefore subject to US law, so UBS had to hand their names over or face severe repercussions.
The 52,000 names in the current case are subject to swiss law.
And that made this case also a political issue.
Being Swiss, I'm curious how this is playing out now. A similar case concerning the European Union and Liechtenstein ended with Liechtenstein agreeing to OECD standards, while the EU guaranteed the tax evaders with a tax amnesty (no fines, but having to tax the evaded sums).

Aug 12 05:44 PM

[jstratt:]

This is my take on the negotiations. The negotiations were over the handling of 3 different categories within the 52000 total.

1) Regular cheats
2) 100 Million + cheats
3) Those who made substantial political contributions

If you are in class 1 you are being handed over. If you are in class 2 you have been invited to make political donations and if you are in group 3... no one will ever know.

Here is how you will if I am correct. If out of all the big money tax evaders a bunch of political contribution issues dont get raised you will know the fix was in.

Aug 12 08:38 PM

[Moon Kil Woong:]

Hmm if you really want to talk about tax evasion you should look at corporations that offshore their entire business and bank accounts so they don't pay a cent in taxes. The worst offenders are the telecoms. But that all legal. Congress is great at making loopholes to their biggest donors. After all, there are sheepie citizens who will pay for everything and their kids who they can charge the deficit to.

Aug 13 12:52 AM

[Alan Young:]

I find it strange that the first three comments all took the side of the tax evaders against the U.S.

How patriotic!

Of all the ways Obama might think of to raise more tax $$, getting billionaires' stash from Switzerland is the only one that will boost his popularity. Americans don't like rich people who don't pay their share.

Moon is absolutely correct--corporations are among the worst offenders, and Congress tends to accommodate them too well. Perhaps they are next on the list.

Aug 13 08:50 AM

[John Galt:]

I'm dissapointed the Swiss broke hundreds of years worth of secrecy law to give in to those thugs at the IRS.

People say that Switzerland acts as a form of checks and balances in Europe from them having even higher rates. The euro governments have to always be aware that if taxes get too high... people have a... shall we say Galt's Glutch.

Aug 13 08:53 AM

[Allan Frain:]

Swiss complicity in this took a quantum leap forward with their AIG money.

A shoebox full of Gold is preferable to fiat in ANY bank--Swiss or any other.

Aug 13 09:27 AM

[LoveShorting:]

I am bewildered that so may commenters take the side of wealthy tax cheats. It's OK to make money legally but at least pay your share. This deal is righteous.

Aug 13 09:45 AM

[see.clay:]

+1

Why cant they make the corporations pay - afraid of losing their funnel money? Billions in revenue and paying out 1%, wish I had that luxury. They are the direct beneficiary of a seemingly endless train of govt programs, then turn around and look for every loophole possible and move their "corporate offices" to dubai or wherever the heck they are.

I always look forward to reading your comments MKW.

On Aug 13 12:52 AM Moon Kil Woong wrote:

> Hmm if you really want to talk about tax evasion you should look
> at corporations that offshore their entire business and bank accounts
> so they don't pay a cent in taxes. The worst offenders are the telecoms.
> But that all legal. Congress is great at making loopholes to their
> biggest donors. After all, there are sheepie citizens who will pay
> for everything and their kids who they can charge the deficit to.

Aug 13 09:59 AM

[TeresaE:]

If our government actually wanted a "fair" taxation, they would scrap our entire system and start over.

The usurious tax rates (set to go higher soon) FORCE people to consider felonies.

Tax low and get all the pennies. Tax high and only get the pennies you find.

My favorite part of this whole debacle will be the SHOCK of the middle class when their Bush tax cuts (you know, for the rich only) expire next year and smack them right in the ass.

Many studies have been done on tax collections vs. revenues. And in every one the higher the tax rate the lower the collections.

This will have the same exact effect and the public (and Washington) will be shocked yet again.

Aug 13 10:15 AM

[John Galt:]

TeresaE

Agreed and while the Bush tax cuts were for all tax payers, the Obama tax policy is increased taxes for some, while a 400 dollar tax cut or basically 8 bucks a week for others.

Why are there thousands and thousands of pages worth of tax law anyway? Why can't it be simple and clear what you made and what you owe? Everything is politicized... You do this ( we like it) tax break, you do this ( we don't like it), tax increase... over and over and over again. Special rules for special situations.

Why does the guy who runs the IRS even have to buy turbo tax anyway and still make mistakes? He's a tax cheat at best or grossly incompetent at worst.

Aug 13 10:35 AM

[Hot Richard:]

Love,
"I am bewildered that so may commenters take the side of wealthy tax cheats."

Just because it is illegal, don't make it wrong. Support for prior Swiss banking secrecy is also a big vote against US tax laws, the IRS, the all powerful and extensive reach of the state's fist, and the fundamental expression that we all exist as living beings and not primarily as a function of the state. I work hard and at some point I have had enough taken from me by people who then decide (as if they are god) on what they deem fit to fund. Bah! Puny humans.

Aug 13 10:38 AM

[Hot Richard:]

"If our government actually wanted a "fair" taxation, they would scrap our entire system and start over."

And it would be a "one price for everyone" model. Everyone would pay the exact same amount. That is fair. Anything else is a mutation for personal gain of the word "fair" and yet-another form of wealth distribution.

Everyone pays $10k. Sounds crazy? Well excuse me, but $10 trillion in debt and a billion pages of tax codes sounds even crazier, Captain.

Aug 13 10:42 AM

[Swashbuckler:]

"I find it strange that the first three comments all took the side of the tax evaders against the U.S."---Newsflash, Alan. The so-called "tax evaders" ARE the U.S. And citizens of the U.S. use offshore accounts for other reasons besides protecting themselves from being raped by the government through absurdly high taxes.


On Aug 13 08:50 AM Alan Young wrote:

> I find it strange that the first three comments all took the side
> of the tax evaders against the U.S.
>
> How patriotic!
>
> Of all the ways Obama might think of to raise more tax $$, getting
> billionaires' stash from Switzerland is the only one that will boost
> his popularity. Americans don't like rich people who don't pay their
> share.
>
> Moon is absolutely correct--corporations are among the worst offenders,
> and Congress tends to accommodate them too well. Perhaps they are
> next on the list.

Aug 13 11:27 AM

[ERCaptain:]

Comrade -- it is patriotic to pay taxes!

The Fatherland over all?!?!

To which country should I pay taxes? The one I like the most? Where I earn it? And after I have earned it and and paid taxes, am I free to take my money where I want to? Who does it belong to? In a global economy what gives the US the right to know everything about what I have anywhere in the world? If I earn my money outside of the US why should I bring it back to the US?

When we die, should we pay taxes again?

I am not encouraging criminality, but I am encouraging fairness and privacy. I say that we should stand up for global freedom and not tyranny. What I do with money outside of the US is not the US's business. Their authority ends at their shores. The ugly tactics used by the US to strongarm Switzerland and others to comply with US rules is scary at best! Are we creating global "Big Brother"?

"I wouldn't mind paying taxes - if I knew they were going to a friendly country."
Dick Gregory

How about these unpatriotic folks?
Calvin Coolidge said
"Collecting more taxes than is absolutely necessary is legalized robbery. "

Milton Friedman
"I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible."

John Maynard Keynes
"The avoidance of taxes is the only intellectual pursuit that still carries any reward."

The Swiss have been great about avoiding global tyranny in the past. I think this is a sad chapter in Swiss history.

On Aug 13 08:50 AM Alan Young wrote:

> I find it strange that the first three comments all took the side
> of the tax evaders against the U.S.
>
> How patriotic!

Aug 13 12:43 PM

[Swashbuckler:]

Here is a comment I posted a few weeks ago on SA. I am unsure of the author. Tax his land, tax his wage, tax his bed in which he lays. Tax his tractor, tax his mule, teach him taxes are the rule. Tax his cow, tax his goat, tax his pants, tax his coat. Tax his ties, tax his shirt, tax his work, tax his dirt. Tax his tobacco, tax his drink, tax him if he tries to think. Tax his booze, tax his beers, if he cries, tax his tears. Tax his bills, tax his gas, tax his notes, tax his cash. Tax him good and let him know that after taxes he has no dough. If he hollers, tax him more, tax him until he's good and sore. Tax his coffin, tax his grave, tax the sod on which he lays. Put these words upon his tomb "Taxes drove me to my doom." And when he's gone, we won't relax, we'll still be after the inheritance tax! Accounts Receivable Tax, Building Permit Tax, CDL License Tax, Cigarette Tax, Corporate Income Tax, Dog License Tax, Federal Income Tax, Federal Unemployment Tax, Fishing License Tax, Food License Tax, Fuel Permit Tax, Gasoline Tax, Hunting License Tax, Inheritance Tax, Inventory Tax, IRS Interest charges(tax on top of tax), IRS Penalties(tax on top of tax), Liquor Tax, Luxury Tax, Marriage License Tax, Medicare Tax, Property Tax, Real Estate Tax, Service Charge Tax, Road Usage Tax(truckers), Sales Taxes, Recreational Vehicles Taxes, School Tax, State Income Tax, State Unemployment Tax, Telephone Federal Excise Tax, Telephone Federal Universal Fee Tax, Telephone Federal/State/Local Surcharge Tax, Telephone Minimum Usage Surcharge Tax, Telephone Recurring and Nonrecurring Charges Tax, Telephone State and Local Tax, Telephone Usage Charge Tax, Utility Tax, Vehicle License Registration Tax, Vehicle Sales Tax, Watercraft Registration Tax, Well Permit Tax, Worker's Compensation Tax.

Aug 13 01:40 PM

[max12345:]

Only one thing is for sure in this case: The U.S. will stand on top of an aircraft carrier and declare VICTORY. The "details" will then follow.

Aug 14 11:33 AM

[Alfredo Mar...:]

How many hundreds of billions of dollars are now going to go elsewhere because of this deal? If wealthy Americans want to have offshore accounts, they're not going anywhere near Switzerland. This deal will also spook other potential clients abroad.

Switzerland isn't the only game in town, other countries will be more than happy to take up the slack.

The Swiss have nothing to gain from this deal, they should have told the IRS to shove it. Switzerland has been getting threats from other country's tax authorities since taxes were invented.

The Swiss are shooting themselves in the foot. The number one reason for Switzerland's prosperity and high standard of living is their secretive banking. Once that goes, all that's left is chocolate and overpriced watches.

Aug 14 01:32 PM