At 09:30 AM 10/24/2002 -0400, Tyler Durden wrote:
Offshore Tax Cheats Include Big Names, IRS SaysWe cannot (or even should not) count on those we conduct business with to protect our privacy. As you know, there is substantial historical evidence of misuse of data obtained by law enforcement search warrant requests.
By Kathy M. Kristof
Los Angeles Times, October 24, 2002
The Internal Revenue Service has identified actors, doctors, lawyers, accountants, attorneys and high-end business people in its wide-ranging crackdown on offshore tax cheats, who are believed to be underpaying their taxes by an estimated $70 billion annually.
"These are names you would recognize," said Dale Hart, a deputy IRS commissioner. "We are seeing people you would consider very high profile. We have hundreds of cases under investigation, and we believe there are billions of dollars at stake here."
The IRS is prohibited by federal law from disclosing the names of taxpayers who are under investigation but are not yet indicted. However, in an interview Wednesday, Hart said hundreds of investigations had been launched as the result of a five-year effort to find and identify 1 million to 2 million individuals who are hiding assets offshore to evade taxes.
It's not illegal to hold money in an offshore account. However, any income earned by a U.S. resident from an offshore account must be reported to the IRS. The government believes that about $3 trillion in unreported assets are held in secret accounts in tax-haven countries, costing the U.S. Treasury an estimated $70 billion annually.
Less than two weeks ago, the IRS asked a federal judge in Los Angeles to force local companies including Hughes Electronics Corp.; Walt Disney Co.; International PADI Inc., a diving firm with offices in Rancho Santa Margarita; and the Four Seasons hotel in Beverly Hills to turn over transaction records on customers whose credit cards are issued by banks in Antigua, Barbuda, Bahamas and the Cayman Islands.
So, what's a company that really cares about its patron's privacy to do? One viable way may be use a method similar to offshore trusts. Place company client and transaction databases in a data haven with no provision for U.S. employees to access more than single client at a time without offshore control. This could be made similar to trust "duress" provisions.
steve
