Obama Administration Puts the Squeeze on Tax Havens

Posted: Jun 11, 2011 7:04 PM
Obama Administration Puts the Squeeze on Tax Havens Reuters reports that the Obama Administration's Department of Justice is going after tax havens in Switzerland in the face of budget deficits and a push to eek even more tax revenue out of U.S. citizens.

Swiss and U.S. authorities have held informal exploratory talks that touched on regularizing untaxed money held by wealthy Americans in secret Alpine accounts, a spokesman for a finance ministry office said.

The Foreign Account Tax Compliance Act (FATCA) is a U.S. bill adopted in March 2010 that forces non-U.S. banks to automatically share a vast amount of information regarding the bank dealings of their U.S. clients.

In 2009 Berne agreed to hand over to Washington bank data relating to 4,450 clients of UBS, piercing a hole in Swiss bank secrecy laws.

The U.S. Department of Justice continues to go aggressively after U.S. citizens who have hidden assets abroad, with a senior U.S. Internal Revenue Service figure saying this month the authority was about to probe at least one bank.

This is a tricky situation for the U.S. Department of Justice. It's often legal to bank overseas tax-free; the U.S. government's tax-collecting bureaucrats don't like it, but that doesn't make it illegal. Nevertheless, it looks like Eric Holder is going after tax havens.