Foreign Tax Havens Essay

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Foreign Tax Havens: Update
Sarah Stark

For many years, wealthy Americans avoided US tax policies by “hiding” their sizeable assets in the banks of nations – such as Switzerland – where confidentiality policies made “tax havens” possible. Tax havens refer to countries that offer little to no tax liabilities while providing little to no financial information to foreign tax authorities. They do not require citizenship for people to benefit from their tax policies. However after discovering information about the identities of some of the clients of these Swiss banks in 2009, investigations of these offshore accounts began. The result of these investigations was the indictment of over 100 taxpayers and advisors. On Aug 20, 2009, the IRS announced that Swiss bank UBS AG would reveal the identities of 4,450 secret accounts as part of a government settlement. This is a huge turning point in the traditionally confidential policies of the Swiss bank. Additionally, this could mean the beginning of criminal proceedings against US taxpayers using Swiss accounts to evade taxes. On Sept 11, 2012 Bradley Birkenfeld – former employee of UBS – who aided in the international crackdown on tax havens collected $104 million in exchange for the information he exposed.
Upon these investigations, Americans with Swiss accounts are forced to make some important and possibly life changing decisions. Would they be better offer renouncing their American citizenship, to protect their assets and avoid investigation? Presently in 2014, investigations of offshore accounts begin to go past Swiss banks. The newest area of interest is the Cayman Islands. The IRS carried out a yearlong investigation resulting in the arrests of 3 financial advisers from

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