Late last week, just around Tax Day (April 15th), the IRS released its first batch of indictments pursuant to a settlement with Swiss Bank UBS that it give up the names and bank balances of its richest clients, who hadn't been reporting their offshore accounts.
The indictees fit a basic pattern. They were all older people, ranging in age from the early 60s to the early 80s. Only one of the batch was a woman. Basically a bunch of retirement age individuals. They had foreign account balances typically in the millions. Hiding income that would have generated at least hundreds of thousands in taxes, had it been properly reported.
Why this bunch? As bank robber Willie Sutton said, "I rob banks because that's where the money is at."
In most cases, they stand to be sentenced to one to two years in prison. A slap on the wrist. Not a life sentence. Then they can get on with their rich lives, made just a bit lighter by some tax penalties. In the manner of say, Martha Stewart (who's in that age bracket).
As the amnesty period ended last fall, the IRS did get a flurry of self-reporting, from people that they didn't really want to hear from. Mainly immigrants, who had set up Swiss bank accounts before entering the U.S., and basically had forgotten about them. In nearly all cases, the balances were small, sometimes below the $10,000 minimum technically required for reporting.
But the IRS wasn't looking to chase balances slightly above this $10,000 minimum. In many cases, the possessors had another out: The accounts had not been touched in six years, which is basically the"statute of limitations" for chasing unreported income, except where fraud was involved.
Honest but non-compliant "small fry" did the "right thing" and filed for amnesty. it was the "big fish," the ones that had the most to lose, that didn't.
Because they apparently believed, as Leona Helmsley famously said, "Only the little people pay taxes.