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A U.S. Internal Revenue Service tax amnesty program ends Thursday for wealthy Americans believed to have undeclared income hidden in offshore accounts.
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An estimated $100 billion in U.S. taxes is lost annually because of individual and corporate tax evasion, according to a U.S. Senate committee.
Following are some of the recent developments related to attempts to pierce the veil of bank secrecy that help rich taxpayers hide their wealth.
UBS Lawsuit, Arrests
The centerpiece of U.S. government efforts is a long-running case against Swiss banking giant UBS AG.
The bank in February settled for $780 million a criminal investigation accusing it of helping American clients evade taxes on about $20 billion in offshore accounts. In August, the bank settled a separate civil probe agreeing to turn over the names of 4,450 account holders to the U.S. government.
As part of the criminal deal, UBS admitted it "participated in a scheme to defraud the United States" and that its private bankers and managers "actively" helped U.S. clients hide funds.
Seven people have pleaded guilty in connection with the UBS [
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] probe, including Bradley Birkenfeld, who once headed UBS' private banking division. Birkenfeld, who was sentenced to three years in prison after agreeing to cooperate with the probe, once smuggled a customer's diamonds into the United States in a tube of toothpaste.
Four foreigners were charged with helping Americans evade taxes and remain fugitives from U.S. arrest. They are ex-UBS bankers Raoul Weil and Hansruedi Schumacher; Swiss lawyer Matthias Rickenbach; and Mario Staggl, a banker who was not an employee of UBS.
The Swiss government in August sold its 9 percent stake in UBS, which it had acquired to help it weather the economic crisis, amid steep losses from soured investments.
In a dramatic congressional hearing last year, Birkenfeld appeared by television with his face obscured and voice altered. Several executives invoked their Fifth Amendment rights.
U.S. Amnesty Program
The IRS's offshore tax amnesty program initially set a Sept. 23 deadline for taxpayers to come forward. The deadline was extended to Oct. 15 and IRS officials say there will be no more extensions.
Individuals who participate in the program get a reduced fine, pay back taxes and interest and are generally free from criminal prosecution if their income did not come from illegal sources and meet other criteria.
The IRS in late September estimated that more than 3,000 individuals have turned themselves in to authorities to take advantage of the reduced fines.
Offshore Tax Havens
In April, G20 leaders agreed to name and shame countries that refused to cooperate in ending offshore tax evasion.
Pressure was especially intense on Switzerland, which manages about one-third of an estimated $7 trillion of offshore wealth.
Switzerland has now signed tax information pacts with a dozen countries, the requirement for it to be removed from the list of international offenders.
The Cayman Islands, the British Virgin Islands, Bermuda and Luxembourg are among the countries that have signed 12 bilateral tax information pacts, qualifying for removal from the "gray" tax haven list of non-compliance maintained by the Organization for Economic Cooperation and Development.
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