S. F. Chronicle:Swiss bank gives up cheats

Swiss bank gives up cheats

Anonymous. San Francisco Chronicle. San Francisco, Calif.: Aug 24, 2009. pg. A.10

Abstract (Summary)

Governments in the United States and Switzerland have reached a deal to disclose the identities of thousands of account holders who have been using the Swiss bank to evade taxes.

» Jump to indexing (document details)

Full Text (337 words)

(C) San Francisco Chronicle 2009

Swiss banks are seeing their much-vaunted privacy crumble, and it can't happen fast enough for the deficit-ridden United States. Governments in the United States and Switzerland have reached a deal to disclose the identities of thousands of account holders who have been using the Swiss bank to evade taxes.

This is good news, both for average Americans (who, after all the bank bailouts, have every reason to feel that the rich get treated differently) and the U.S. Treasury. Sources report that these accounts, with Swiss bank UBS, hold more than $10 billion.

To Americans, the fact that UBS was able to hide this money for so long is reprehensible. But UBS (which is only one bank of many) was enabled by Swiss banking law, which prizes secrecy over all else. That's why the Swiss government got involved in the proceedings - and that's why the settlement that was eventually negotiated will allow Swiss tax authorities, not American ones, to root out evaders. This means that the U.S. Treasury will only receive a fraction (4,450) of the clients it suspects of holding tax-evading accounts (52,000).

This also means that plenty of wealthy UBS clients might choose to stay quiet, rather than coming forward voluntarily to the IRS. Why not? Coming forward means you have to pay lots of taxes and penalties, and it also means that other creditors and interested parties (like ex-wives) will discover exactly what you have. Sitting tight keeps all of that information under wraps - unless you're one of the unlucky few that even Swiss authorities are willing to rat out.

This sorry state of affairs means that it's incumbent on the IRS, the U.S. Treasury, and Congress to keep up the pressure on tax cheats, wherever they may hide. Switzerland is a great place for American tax officials to start hunting. But how about a trip to the Cayman Islands, Bermuda or Hong Kong? When it comes to hiding money, tax dodgers will travel the world.

[Illustration]

Caption: Charles Trainor Jr. / Associated Pres