Thursday, May 19, 2011

Links May 19

Cheat Street: How U.S. Banks Help Foreigners Dodge Their Taxes CBS
May 18 - 'Jack Blum, a former U.S. Senate investigator and an authority on offshore tax shelters' - and Chair of TJN-USA - 'says U.S. bankers “sell tax evasion to citizens of Central America, the Caribbean, all over Latin America.” The U.S. government hasn’t put a stop to it, Blum says, because bankers and politicians don’t want to stop the flow of foreign cash into the United States.'

See also:
Bankers, consumer groups clash over IRS plan to crack down on foreign tax cheats iwatch
May 19 - "Imagine a coming wave of human and financial disasters: Kidnappings in Latin America. Bank failures in Florida. Millions of jobs lost across the United States. What could cause such chaos? According to American bankers and their allies ... the Internal Revenue Service plan that would require U.S. banks to report interest paid to foreign nationals with deposits." As Rebecca Wilkins of our friends at Citizens for Tax Justice observes: "U.S. banks are using scare tactics to prop up a regime of financial secrecy that allows tax evaders and money launderers to thrive."

BAE pays $79m fine to settle civil case with US government The Telegraph
May 17 - Fine imposed on BAE on being charged with conspiracy to defraud the US - The Department of Justice claimed that BAE transferred more than £10m and $9m to Swiss bank accounts controlled by an agent with a high probability that a payment would go to a Saudi Arabian official in a position of influence. Such a settlement approach has been show to be far too lenient - for example see here.

How a Nigerian oil company Made N3.1 Billion Profit, Dodging Taxes Sahara Reporters

May 15 - Reporting on a story we blogged earlier here
. "Tax avoidance among CDC’s [the UK's Commonwealth Development Corporation] companies is unsurprising since the fund has modelled itself as a private equity investor, a structure in which tax dodging has always been an intrinsic part. But that doesn’t make the British development fund’s indulgence in the shady business any less damaging for poor countries like Nigeria."

India: Tax Department Vows Crackdown on Black Money Wall Street Journal

May 19 - 'Retired Supreme Court Justice P.V. Reddi, the chairman of India’s law commission, said that to effectively clamp down on black money, authorities “need to instill a fear of detection” in taxpayers. But for this to work, a culture shift has to happen among law enforcement authorities, too.'

What happens to Glencore if Jersey fails the EU Code of Conduct? Tax Research UK
May 18 - Richard Murphy considers that Jersey will fail the EU Code of Conduct tests for acceptability on business taxation later this year. As he also noted recently, Glencore, the world’s largest trader in commodities, has launched itself onto the world’s stock exchanges through a Jersey company. We've blogged and linked previously on the Glencore story, as here.


Jersey shifts the burden of tax from tax abusers to ordinary people Tax Research UK

May 19 - Richard Murphy reports on how "The tax burden is shifted from the tax abusers who use the island to avoid their obligations elsewhere in the world onto the ordinary people who live there."

Is the IRS’s ‘Wealth Squad’ Working? Wall Street Journal

May 16 - "The IRS has garnered a lot of headlines with its crackdown on the wealthy. The Global High Wealth Industry Group, formed in 2009 and also known as “The Wealth Squad,” has a team of agents specially trained in the dark arts of tax evasion by the rich. ... But at least it is working right? We don’t know."

US offshore accounting may leave investors in dark Reuters
May 19 - "U.S. regulators want some companies to tell investors how much of their cash they hold in other countries to clarify how much money a company has when it needs it. ... But investors may not know that if the company repatriates the money, it may have to pay a big tax bill ... A company might not be as liquid as it initially appears."

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