UBS Will Release Names Of Americans Hiding Money From IRS

Swiss bank UBS, which has “admitted conspiring to defraud the Internal Revenue Service and agreed to pay $780 million to settle a sweeping federal investigation into its activities,” has agreed to release the names of Americans who have been secreting away cash in UBS’ fabled Swiss bank accounts. The U.S. Justice Department has been investigating about 19,000 accounts, but the New York Times says the bank may only release a couple hundred names. Update: Now the IRS has asked a judge to demand that UBS turn over the names of around 52,000 clients. UBS says it will “vigorously challenge” the new request.

UBS has admitted that it worked in cahoots—in cahoots!—with its American customers to defraud the U.S. government, going so far as to encourage them to hide valuables in Swiss safe deposit boxes and use Swiss credit cards to evade the IRS. It seems they finally agreed to turn over the names to avoid indictment, which would have been disastrous for the bank.

It’s unclear what will happen next when the names are released, but Marketwatch reported that the IRS plans to go after the American citizens who have used UBS accounts to avoid paying taxes:

“These taxpayers should note that today’s agreement states that the U.S. Government will continue to seek enforcement of the summons,” IRS Commissioner Doug Shulman said in a statement.

“People who have hidden unreported income off shore need to get right with their government,” he added.

“A Swiss Bank Is Set to Open Its Secret Files” [New York Times]
“UBS to pay $780 million in tax conspiracy case” [Marketwatch]
“UBS pressed for 52,000 names in 2nd inquiry” [International Herald Tribune]
(Photo: Allie_Caulfield)

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  1. RandomHookup says:

    The Wall Street version of the latest MLB steroid scandal.

    • DidIDoThat says:

      @RandomHookup:

      Well put, I wonder if the Swiss will start a chain reaction in other places like the Cayman islands.

    • GildaKorn says:

      @RandomHookup: Indeed. However, there’s a significant difference. The American people have not been harmed by baseball player’s steroid use (unless they were betting against the users, I guess), whereas the people all had to pick up the slack from these account holders.

  2. vliam says:

    Please let me be on the list.
    Please let me be on the list.
    *crosses fingers*

  3. InThrees says:

    @undefined: And this is why I think tax law is awful from a human rights perspective.

    What do you call the entity that claims sole right and domain over the fruits of your labors?

  4. Eldritch says:

    My father has a UBS account, but he also used to work for another Swiss bank and says not as much shady stuff goes on as you’d imagine. He said the ones they should really look into are the banks in small island nations that rich people and big companies use to store money, as well as the Principality of Liechtenstein. It has more registered companies than citizens and many big businesses use it to do all sorts of illegal things.

    This UBS stuff is the tip of the corrupt iceburg.

    • Chris Miller says:

      @Eldritch:
      The difference between the Swiss banks (like UBS) and those island banks is Switzerland is a country with a legitimate government & legal infrastructure, instead of a country using their sovereignty almost solely to protect a banking racket.

      The tip is all we can pursue via a criminal justice route.

    • fatcop says:

      @Eldritch: Shhhhh don’t blow it for those of us.

  5. dako81 says:

    They should tell the government to shove off. Oh well.

    • TheRealAbsurdist says:

      @dako81: Yeah, I’d love to see that.

      Then I’d love to see the government revoke their charter, seize their assets, and put their upper management in jail.

      You seem to have things reversed, so let me clarify for you. Corporations exist at the behest of governments. Not the other way around.

      • Powerlurker says:

        @TheRealAbsurdist:

        The interesting part in the whole drama is that UBS had to get permission from the Swiss government to turn over the names because of Swiss banking privacy laws. Up until that happened, UBS faced the unenviable position of facing prosecution and contempt charges in the US for refusing to turn over the names or facing prosecution in Switzerland for violating their customers’ privacy.

        • Eyebrows McGee (now with double the baby!) says:

          @Powerlurker: I understand they’ve been under a lot of pressure from various European governments for some years now to bring their banking regulations more in line with other European and North American nations’. I think it was pretty inevitable the Swiss gov’t was going to rule against them; some European governments have even threatened trade sanctions over the banking privacy rules.

      • Trai_Dep says:

        @TheRealAbsurdist: Clearly, you’re not a Republican.

      • Segador says:

        @TheRealAbsurdist: How fitting your name is, sir.

      • t-r0y says:

        @TheRealAbsurdist:
        Corporations exist at the behest of governments. Not the other way around.

        The the most Absurdist thing I’ve ever heard!

    • DidIDoThat says:

      @dako81:

      They as in the tax payer or them as in the Swiss?

  6. LegoMan322 says:

    Everyone can thank Mr. Phil Graham of ” America is a bunch of winers” fame and “Mr. Old Guy John McCain’s failed Presidential campaign.”

    They are responsible for most of what is going on in the banking industry. I am hope that the new administration has really rigid rules going forward. If they do not put some regulations in play we will probably fall like Rome….Hail Caesar!!

  7. bohemian says:

    This ought to be interesting as the IRS uncovers why they were diverting money and who was doing it. Between all the investment scams and UBS rolling over what disgusting revelation will be next?

    • econobiker says:

      @bohemian: I’d rather that they would eliminate the synthetic coal tax credit for companies. The recently bailed out AIG got into the business just for the tax credits alone. Some of the nimrods there made their bones by that shyster-like yet legal deal…

  8. MoebiusSK8 says:

    I don’t like paying taxes anymore than the next guy so it would be nice to see some taxe cheats get spanked.

  9. Russell Miller says:

    What’ll happen is: The IRS will get the names, they will find that more than half of them are prominent politicians or other public figures, and we will never hear about this again.

    Happened with the “DC Madam”.

    • bcash says:

      @Russell Miller: so true!

    • ARP says:

      @Russell Miller: I think some names will get released and Limbaugh, Hannity, Olberman, etc. will use selective names to create the media narrative that all D’s or R’s are corrupt, elites, etc.

      • WalrusTaco says:

        @ARP:

        Elites? You think? How much money do you need before you start considering a swiss bank account? 1M? 10M? 100M?

    • t-r0y says:

      @Russell Miller: That’s why UBS won’t be release ALL the names. From the article:

      …but UBS ultimately may disclose the identities of only a few hundred customers

      Yeah, I guess there’s only a few hundred that are NOT politicians or well connected individuals.

      That’s why I bury my millions in the back yard.

      • RogueSophist says:

        @t-r0y: Hey, can you send me your address? No particular reason. I just wanted to, um, send you some marketing materials. Great! Look forward to hearing from you.

      • snowburnt says:

        @t-r0y: Billionaire gets a call: “hi, this is UBS, we have to pay a $780 million fee AND reveal our tax dodging clients to the IRS. We have helped you hide $x.xx million over the years, if you can contribute to our fund to mitigate the fees, we’ll see what we can do about seeing if you really need to be on that list”

    • MeOhMy says:

      @Russell Miller: Exactly. All for show. We’ve got a government full of tax cheats on both sides of the aisle and we’ve got a tax code so ridiculously complex that everyone last citizen is probably a tax cheat in some way anyway. All this will do is drive our friendly neighborhood wealthy tax cheats to stash their money somewhere else.

    • Eyebrows McGee (now with double the baby!) says:

      @Russell Miller: I am SO. PSYCHED. to see the names released. And since there will be criminal prosecutions, we’ll at least get those names released to the public.

      Article I read (maybe the NY Times?) was saying there were some “bold-faced names” that are hugely well-known from NYC, LA, and Miami that are going to be released.

      Mmmmmm … Schadenfreude before breakfast.

    • varro says:

      @Russell Miller: Please, please, please let @Troy F.: The tax code is “complex” to allow rich people to take focused deductions.

      If you just get a paycheck and no investment income, you can do a 1040-EZ in a half hour.

  10. jmndos says:

    *cough* *cough* dual citizenship

    • David in Brasil says:

      @jmndos: Dual citizenship won’t save you. The U.S. requires its citizens to report *all* income to the IRS, no matter where it is made or where you live at the time. I’m sure that there are people here who can speak on this better than I can. As I understand it, the US is one of the few countries in the world that require this of their citizens.

  11. acklenheights says:

    The IRS is quite aware of all of the island republics where the rich are stashing their goods and possibly laundering their money. The difference here is that UBS does loads of business in the US. UBS has offices everywhere in North America, and depends on US citizens for a large portion of its operation. The gov’t can shut down their dealings here very easily and possibly deal them a fatal blow as they’ve been crippled by the whole financial mess. UBS has no recourse here, they pretty much have to relent.

    But as for other operations that are more entrenched in foreign nations (especially the island “nation banks,” the gov’t can do very little about those.

    • johnva says:

      @acklenheights: Track who the U.S. customers of the island nation banks are, and freeze all their assets here in the U.S. until they agree to turn over their offshore assets.

    • RedwoodFlyer says:

      @acklenheights: You mean like how Monster Cable pays 90% of their earnings to Monster in Bermuda as a “licensing fee?”

      • ARP says:

        @RedwoodFlyer: Big companies do it too: Stanley, Tyco, Genpact (IT and outsourcing),lots of insurance and financial services companies, etc. If we actually closed this loophole, we could cut business taxes for ALL companies, because the amount we get from all these offshore companies would more than make up for it.

    • Tiber says:

      @acklenheights: They can most certainly do something about it if they wanted to. All they have to do is say, “We want them to answer some questions for us, or we start an embargo (or some other trade restriction).” Watch their little ears perk up.

      • chargernj says:

        @Tiber: True, the other big business for those nations is tourism. Give them the Cuba treatment. No American banking, no American tourist, they will toe the line real quick. Unfortunatly we only wield that big stick against ideological enemies.

        • varro says:

          @chargernj: Yep. Cuba isn’t hurting anything except the feelings of elderly people in Miami.

          These tax havens are taking MREs out of the troops’ mouths.

  12. BuddyHinton says:

    Good thing those bank executives got those bonuses from the bailout money because they’re gonna need it now….

  13. Nitrokart knows CPR and took that guy's wallet says:

    I wonder what made them decide which few hundred names to release…? (I’m trying to suggest they took bribes or something. Considering what they did already… help people defraud the gov’t and suggest using Swiss cards…)

    • ARP says:

      @Nitrokart: There’s a bit of a thread above on. It’s either the most egregious of the groups or perhaps its the “safest.” Meaning, no politians, CEO’s, etc. Just some rich people that we can all hate while the rest of the culprits (and those who enabled this) disappear in the night. My view is that its a diversion.

      • Eyebrows McGee (now with double the baby!) says:

        @ARP: The first set of names (19,000) is from a Justice Department investigation, and I believe the 250 names that will be released shortly are the ones they already have criminal indictments prepared against.

        The second, much larger set of names (52,000) is the result of a concurrent IRS investigation that has JUST been turned over to the Justice Department, so the process is beginning again.

  14. theodicey says:

    “Slave master.” Damn, you libertarians have no sense of humor.

    These scoundrels are cheating me and you and everyone else, causing the rest of us to pay more for the government services we’ve chosen democratically.

    I don’t have time to be deputized and take down these arrogant bastards with extreme prejudice, so I’m happy to let the government take care of it.

    The government is the enforcer working for me, not the wronged party. It’s a criminal prosecution, not a lawsuit.

    • Tedicles says:

      @theodicey:
      ‘to pay more for the government services we’ve chosen democratically.’

      er…is that like the ‘Stimulus Bill’?? Because we all got a chance to review that, and we chose to implement that ‘democratically’?? C’mon…this is the gov’t doing what is best for the gov’t, not for the people!! This is just another stepping stone for the gov’t to take full control of our lives…
      I won’t even get into the whole argument about the legality of current taxes!! Wake up people, before it is too late!!

  15. Alexander says:

    If the IRS really wanted to get tax cheats, they should just go for the shady tax preparation offices in the US. I worked a tax preparation office in a lower class part of Los Angeles back in 2005-6 and you wouldn’t believe what goes on there. During tax season they would do about 1,500+ tax returns and about 99% of them were filled with lies. The most common practices were to under report 1099s, deduct non-existing expenses and the #1 cheat was finding “dependants” to claim the EIC. They would do this by obtaining ITINs for “family” in other countries. No question asked and wham, $4,000 tax return just like that. You might think it’s only 1,500 tax returns per year, but these places are in every corner and they all do the same. Multiply 1,500 by thousands and I’m sure there are billions of dollars being stolen. You might think that sooner or later they would get audited, but in the time I was there we only heard of 2 people being audited.

    • GildaKorn says:

      @Alexander: If you’re not joking, why not report these tactics to the IRS yourself? Surely there are whistle-blower laws that would protect you.

      • Trai_Dep says:

        @GildaKorn: And (cough) a reward, I believe.
        I’ll take my vig for this tip in the form of a donation to skool Teh Kids.

      • t-r0y says:

        @GildaKorn: Because these are the people that the government wants to get the wealth that they’ve taken from the working class.

        • ARP says:

          @t-r0y: Funny you talk about the government wanting the poor to take money from the working class when this whole story is about how the ultra-wealthy have been hiding billions in off-shore accounts. Yet you focus on poor people as the ones worthy of our scorn.

          • t-r0y says:

            @ARP: No, the politicians and bureaucrats are worthy of my scorn. I don’t think they care about stopping type of abuse mentioned by Alexander.

            But I also believe there is a moral difference between hiding income from the IRS and fraudulently taking more in tax credits (welfare) than you are legal entitled.

    • FreemanB says:

      @Alexander: The IRS doesn’t have the resources to go after thousands of people per year, so they have to choose their battles. Which is better, going after 1000 people that got an extra $4000($4000 * 1000 = $4,000,000), but aren’t likely to be able to pay it back anyway, or going after 100 people that each owes $1,000,000($100,000,000) in taxes and can likely afford to pay it? All politics aside, it makes sense to go after the people that can afford to pay.

      If a lot of people are using something like you describe to cheat on their taxes, then the IRS will usually change the rules to try to prevent the fraud. In this case, they may require some kind of documentation that the dependent actually exists. There have been several loopholes like this closed over the years for similar reasons.

      • Alexander says:

        @FreemanB: Yeah, that is what I figured all along. These people could never pay the money back and if they bust this one guy, another one would spring up. I agree with you, that the IRS should have better rules and close all these loopholes. Specially for dependants with ITIN numbers. It so damn easy to get an ITIN number. Anyone can get one in a matter of weeks.

    • c_c says:

      @Alexander:
      If you knew they were cheating why not say something before they filed and got a refund from the IRS? It seems like the IRS doesn’t have the resources to crack down on this, so we need some help from the people who can. If job security is the concern, the government has to step up and protect the people (tax preparers) who are trying to do the right thing.

      • RedwoodFlyer says:

        @cc82:

        Last I checked, tax preparation services that aren’t full blown accountants for a firm/family/individual are mandatory reporters – if they smell fraud, they better report it.

    • chargernj says:

      @Alexander: I see it all the time too. I’m a financial aid counselor at a college and I often have to verify peoples household finances. while it isn’t my job to report people to the IRS, in fact I’m not supposed to. But when I come accros improperly filed returns, I am required to force them to correct their returns if they wish to receive aid.

      You should see how angry some people get when they are told they have to file a 1040X or they won’t get any aid.

  16. Patrick Henry says:

    What has the USA become? The rich dodge taxes, Madames in D.C. host famous politicians and are quickly covered up, Madoff Makes off with billions and walks the streets, corporations screw over the working citizens and get BAILED OUT, auto companies fail at producing quality products and get bailed out, only to request MORE money (While threatening the loss of jobs) as the average Joe foresaw, and now another monumental bill of spending has passed.

    When does the average person finally have enough? When will we all stand up and fight the government for screwing us all over? For taxing and enslaving our future children? For throwing the country into ruin while the working families suffer from the decisions of the rich? For keeping those responsible in offices who brought the most powerful country to its knees?

    What new nightmare involving banks, fraud, tax evasion, politicians, and the scum of America make the news next?

    • god_forbids says:

      @Patrick Henry: Democrats & Republicans = Populists

      The “average person” will never “have enough” up as long as they are spoon-fed a piece of the pie. Gov’t in the US operates on the notion that you toss the folks a fish and watch ‘em put their fins together.

      • ARP says:

        @god_forbids: I think you nailed it. Both parties have co-opted the populist message in their own way and “they are the ones fighting for you.” There is still a fundamental difference between the parties in the role of government.

    • t-r0y says:

      @Patrick Henry: Great post! When will we say enough is enough. We need to take action, get the crooks out of office (BOTH sides of the isle).

  17. Mr. B says:

    Note to self: Don’t hide money in foreign banks that have US branches.

  18. Trai_Dep says:

    Forfeit their sheltered money then revoke their citizenship. Let’s see how they like being proud citizens of Antigua, with a middle-class net worth.

  19. fatcop says:

    There are legitimate reasons to put your assets in countries with private banking laws. For instance, if I decide I want to drop everything and disappear, it’s my right to do so.

    If I am of the means to walk away from my job, my friends, family, and never be found, whose business is it other than my own?

    Should I have decided to do the above, my every transaction, location, etc can be tracked.

    • fatcop says:

      @fatcop: Can’t be tracked I mean.

      By the way, [www.amazon.com] , my copy is signed.

    • bohemian says:

      @fatcop: What annoys the heck out of me is that I can not get a legit account at some place like Barclays in the UK. I am forced by our gubmint to get one with Barclays US bank. I am not talking about hiding money or not paying taxes on it. Simply wanting to have some of your money held under another countries banking system. I tried to do this before everything tanked, saw the writing on the wall and trusted the UK’s system more than ours.

      • ARP says:

        @bohemian: Depends on why you want money in another country. I opened an international account when I lived in UK with Citibank. It’s essentially a US account, but I was issued UK based debit cards, didn’t have to pay international ATM fees, etc.

    • RandomHookup says:

      @fatcop: I’m not sure disappearing is actually an established right. The IRS, at least for US citizens with a certain level of income, seems to believe you can’t.

  20. krunk4ever says:

    If the IRS were smart…
    [www.krunk4ever.com]

  21. JanetCarol says:

    sounds like we have something to hold against them and it’s probably some sort of blackmail scheme to get names from them, so we do not release their dirty secret.

  22. Bladefist says:

    You can only avoid paying your taxes if your democrat politician. When will these people learn the rules.

    And if the top 5% didn’t have to pay 60% of the tax, perhaps they wouldn’t take such risks to avoid taxes.

    When you take that much money from them, and none from other people, it’s called stealing.

    • Evil_Otto would rather pay taxes than make someone else rich says:

      @Bladefist: The top 5% probably also have 60% of the money, so it’s only fair that they pay a proportional amount. Even if they’re paying more numerically and percentage-wise than lower income people, guess what. THEY CAN AFFORD IT. If you make $5M a year, and have to pay $2M in taxes (40%), guess what? You still took home $3M. Boo fucking hoo.

      • lannister80 says:

        @Evil_Otto: /agree

      • Bladefist says:

        @Evil_Otto: It’s not true they have 60% of the money. It’s not proportional, because they pay higher percentage of taxes.

        And it is boo fucking hoo. They earned that money, and taking more of it then others (percentage wise) is stealing.

        Class envy is so unbecoming.

        • Evil_Otto would rather pay taxes than make someone else rich says:

          @Bladefist: Sorry, don’t buy it. The ones making more money can afford to pay more percentage-wise.

          I’m really sick of people complaining about taxation. Base your lifestyle off your take-home pay and shut up.

          • Yossarian says:

            @Evil_Otto: So why not tax everyone down to the same after tax income?

            Or tax $5 million down to, say, $100K and they’re still doing better than average and can afford it, right?

            • Evil_Otto would rather pay taxes than make someone else rich says:

              @Yossarian: Don’t put words in my mouth. I’m not saying the government should cap out take home pay, I’m saying that the rich should pay an amount proportional to the amount of wealth they have. So a group that has 60% of the wealth should pay 60% of the tax revenue.

              • Yossarian says:

                @Evil_Otto: It’s not a wealth tax, it is an income tax. Or are you proposing a wealth tax?

                ” I’m not saying the government should cap out take home pay…” If the standard, and it seems to be your standard, is “they can afford it” it certainly doesn’t seem like a very big leap from “they can live on $3M” to “they can live on $100K.”

                How do you logically distinguish between those two scenarios? How do you limit your standard that “they can afford it” to prevent taking in taxes $4.9 million out of the $5 million?

                “Base your lifestyle off your take-home pay and shut up.” Does “shut up” include not staking a claim to the income of others to add to your own take home pay?

                • Segador says:

                  @Yossarian: I still think that a consumption tax makes the most sense- which basically amounts to a wealth tax.

                • johnva says:

                  @Yossarian: “Staking a claim to the income of others to add to your own take home pay”? You mean like all the bankers just DIRECTLY did with their bonuses? One of the good sides of all this is that Republicans are not going to be able to whine about taxes for a long time without being pathetic hypocrites. They created the financial crisis by failing to regulate the derivatives market and hedge funds properly (and in the case of Phil Gramm, actively deregulated it), they masterminded the initial bank bailout, and, more broadly, they doubled our national debt under Bush so they could pay for all their new spending on ill-advised wars, prescription drug benefits, and things like “No Child Left Behind”. They spent all that money we didn’t have, and now they whine when people suggest that we need to actually PAY for that? LOL.

                  • Yossarian says:

                    @Segador: I’d agree with a consumption tax but I don’t think that would be anywhere near a wealth tax given that consumption of wealth isn’t a uniform ratio across wealth levels.

                    @johnva: “You mean like all the bankers just DIRECTLY did with their bonuses?” Yes, I mean like that. I’m not in favor of bailing out the banks or the automakers.

                    The Republicans have abandoned conservatism/capital-L liberalism and attempted to compete with the Democrats in buying votes with other people’s money. I’m certainly not defending them.

          • t-r0y says:

            @Evil_Otto:

            Base your lifestyle off your take-home pay and shut up.

            Exactly. Everyone should learn to live with what they can earn and stop depending on the government for assistance.

          • Bladefist says:

            @Evil_Otto: Duh they can afford it. Just because they can afford it, doesn’t mean the government can take it.

            • johnva says:

              @Bladefist: We live in a democratic republic. If the majority votes for people who want to raise taxes on the rich, the government most certainly can take it. That’s how it works. Progressive income taxes are legal and constitutional, get over it.

              However, even if you disagree with this idea morally, pragmatically it is in everyone’s best interests for us to raise taxes on the rich dramatically to help pay down some of our debt in a few years. It would help to free up our government’s finances and reduce debt interest payments in the long run and thus the need for TAXES REQUIRED TO SERVICE THE DEBT. Think of it like making early extra payments to a mortgage…it means you pay more up front, but you pay less in the long run.

              The rich need a functioning economy just like the rest of us, and that in turn requires a functioning, solvent government. Higher taxes are required for that, and the rich are the only people with lots of excess money for us to tax in the next few years without hurting the economy too much.

              And finally, higher tax rates on the rich are “revolution insurance” (or, if you prefer a less extreme version, “socialism insurance”). They would help to soothe the boiling pot of populist rage that is building among the middle class in this country right now over the arrogance of the wealthy elite class that created this crisis, because then people would have more of a perception that the people who got us into this mess were paying their fair share to get us out of it. If you don’t support a huge increase in social programs and such, going out and defending the rich against taxation probably isn’t the best tactic to take right now. Apparently the Republicans haven’t figured this out yet.

        • Eyebrows McGee (now with double the baby!) says:

          @Bladefist: Are you high? This is like sociology 101. I typically disagree with your politics but respect you as well-informed, but this is a common, easily-checked factual assertion that is well-known to anyone with an interest in finance, tax policy, etc. Denying it makes you sound like you’re drinking the Kool-Aid.

          Federal Reserve data shows the top 5% of the US holding 57.7% of the wealth (measured as net worth, so debts and obligations are considered as well as assets) in the US in 2001. The bottom 50% held 2.8% of the nation’s wealth. More recent data suggests that the bottom quarter may now hold 0% of the nation’s wealth, as their obligations outweigh their assets.

          If we remove houses and cars from the calculation of “wealth,” the top 5% holds an even greater share.

          [www.federalreserve.gov] Dense and slightly outdated, but I have a sinus infection, migraine, and fetus, so I’m not very functional this a.m.

          • Bladefist says:

            @Eyebrows McGee: lol dammit. I knew when I said that I should have looked it up first, but I was hoping no one would call me out on that one.

            In my defense I hadn’t had my coffee yet.

          • Segador says:

            @Eyebrows McGee: I respect your postings, as well. You’re obviously intelligent and your posts are always clear and well-organized. However… Your stats are 100% correct, but I still disagree with the assertion that if you make more money, you somehow owe a much higher proportion of your income to the government. I have friends who make a lot of money, and it’s sad that when their pay goes from $248K to $250K, their taxes took a 15% hike. It makes working harder for a better paycheck seem a little pointless.

            • Ubik2501 says:

              @Segador: How does it make working harder for a better paycheck “pointless”? I’m working my ass off for 20% of that figure you just quoted and would love to make more money, even if I have to pay a bit more in taxes. Higher taxes have, in everything I’ve ever seen, never been a deterrent from making more money, but simply a motivator to do sneaky things with it (like in this very article) to keep from having to pay your dues on it.

              Sure, people are going to game the system at certain break points, but that’s going to be true in any system, financial or not.

              • Segador says:

                @Ubik2501: I’m using round, innacurate figures here for the sake of illustration. By making $2k more, they paid $15k more in taxes, for a net loss.

                • Ubik2501 says:

                  @Segador: johnva actually just made the points I was going to make up above, so… well, just refer back to his post. :) And like Eyebrows McGee said, in any “stepped” system, the steps are going to suck for those who find themselves right at one, including in taxes.

                • johnva says:

                  @Segador: Like I said, that wasn’t caused by progressive taxation. It was caused by the convoluted and overly complex nature of our tax system, which I agree sucks. No one really likes that sort of situation, but it’s not a consequence of having graduated progressive tax brackets. They probably lost a major deduction or something.

            • Eyebrows McGee (now with double the baby!) says:

              @Segador: I didn’t actually post anything about that in this thread. I just corrected the factual assertion.

              Although I do agree with progressive taxation. (And with stepped tax rates rather than continuously variable rates, it’s ALWAYS going to suck balls when you hit the step. It’s ALWAYS a shocker. Doesn’t matter which two rates you’re stepping between, when you hit the step, it sucks.)

            • johnva says:

              @Segador: You realize that they don’t suddenly pay a 15% higher tax bill when their pay goes from $248K to $250K, right? Our progressive tax brackets are “marginal”, which means that ADDITIONAL income once you get to a higher tax bracket is taxed at a higher rate. Your initial income that is still in the lower brackets is still taxed at the lower rate. So you’re still always going to get an income gain by making more money…it just won’t be as large as it would have been. And I don’t really think it’s the people making $250K that we really need to hit hard with taxes…it’s the people making $20 million.

              The one exception to what I’m saying might be if they reach a limit where certain deductions and such based on AGI are phased out.

              • Segador says:

                @johnva: That’s not what I’ve seen on my taxes. When I began to make substantially more money, all my income was taxed at my new, higher rate. Maybe I just got screwed, but that’s how all my colleagues were taxed, too.

                • johnva says:

                  @Segador: You’re probably confused by the fact that the IRS hides these calculations in the “tax tables”. In other words, they precompute the tax for specific income levels, and then you only have to do one multiplication to figure out what you owe. But trust me, the fact that the first part of your income is taxed at a lower rate is included in that multiplier they use. I know this for a fact, because I’ve figured it out myself using a spreadsheet and my numbers matched the IRS tables.

                  Read this article if you’re interested in details: [en.wikipedia.org]

                  • Segador says:

                    @johnva: Thanks for the info.

                  • Ubik2501 says:

                    @johnva: Thanks for the info and the link. I’ll definitely look at this more closely.

                  • Eyebrows McGee (now with double the baby!) says:

                    @johnva: @Segador: Yes, it’s a NIGHTMARE to calculate your own progressive tax rates on each section of your income. I do it for one of my classes to demonstrate how progressive, stepped taxation works to my students who generally only have a vague awareness. The IRS tables are an enormous help and time-savings. But if you only look at the tables, you just see “$X income = $Y taxes” and not the stepping that gets you there.

                    If your income tax on your WHOLE income went up, someone’s screwing with you or you need a better accountant. :) Those above who said either you didn’t see the “steps,” or that you lost a major deduction, are probably correct.

                    Incidentally, when my mom went back to work after 17 years as a SAHM, making literally about 1/10 of my dad’s salary, her income was enough to bump them to the next step — and the tax increase from the new step and from some lost deductions was actually more than her salary that year. But it sorted after a few years as her salary increased. And presumably my dad’s income would have eventually made them hit that bump anyway, resulting in the same problem.

                    (And they were able to afford to “pay” for her to work the first couple years — also increased costs for childcare, increased clothing costs, increased commute costs, etc., that more than offset her salary. Not all families are so lucky — sometimes you have middle-income or lower-income families where one parent stays home because that “step” in taxes combined with the high costs of child care, etc., offsets the income increase and they can’t afford the hit.)

                    • johnva says:

                      @Eyebrows McGee: It’s not really all that hard to calculate it…you just need to understand the mathematical formula it uses. You can do it with pen and paper or a hand-held calculator quite easily. I’ve done it for my state taxes (where it’s a bit simpler because we have a fairly “flat” state income tax with only 3 tax brackets where I live).

                      But yeah, most people I talk to seem to have only a vague understanding of this because of the fact that the tax rates are hidden by the tax tables.

                    • Eyebrows McGee (now with double the baby!) says:

                      @johnva: It’s not hard, it’s just tedious. :) And involves a lot of looking up where the brackets fall.

                • LavenderSoap says:

                  @Segador: Here’s another website that does a great job of explaining how the marginal tax brackets work. You can even plug in your own income and see what percent of your income actually goes to taxes, as opposed to just your tax bracket.

      • Bladefist says:

        @Evil_Otto: And to boot, when the rich hide their money, or, in legal cases, save their money and reduce their investments, what do you think that does to the economy?

    • t-r0y says:

      @Bladefist: Well, technically, Timothy Geithner is not a politician.

    • Tiber says:

      @Bladefist: Yes, and I’m sure if you offer a thief a job, he won’t try to steal from you. Criminals act because there’s an opportunity and a benefit (hell, sometimes they do it just for the fun of it). Many would still be dodging taxes if they only had to pay the same percentage as anyone else.

      No matter how much it may be unfair, that doesn’t make it right. They’re not desperate. Besides, even if the rules are unfair, isn’t also unfair that they don’t have to play by them, when everyone else does? If they want taxes to be lower, they might as well do what they’ve always done, and run for Congress.

      They earned that money by taking advantage of America’s prosperity. Don’t they owe a debt to the ones responsible to the people ensuring it? If they don’t want to pay taxes, they are free to move to another country and only do business there.

      Besides, why do you always assume it’s class envy? I have no problem with the fact that I pay more taxes than the poor.

    • Ubik2501 says:

      @Tiber: That’s a point that everybody seems to miss: The government helps make the acquisition of wealth possible in the first place by building infrastructure, ensuring safety and security, and fostering an environment that’s conducive to business. Taxes go towards building the roads your supply trucks drive on, funding the schools that give you talented employees, and funding the police that keep criminals from stealing your assets. Just because the government isn’t giving you chocolates and flowers every day doesn’t mean you’re not benefiting from taxes. Even if you ignore the issue of percentage of income versus absolute income, it stands to reason that as a businessperson, you utilize the country’s infrastructure far more than the average guy working a service or office job, and thus owe a greater debt to cover that usage. Besides, if you want to try doing business with no government to tax your income, see how well you do in Somalia.

      • t-r0y says:

        @Ubik2501: True, True. If only we could get them to stop all the entitlement programs, pet projects, and interference with the free market. If they stuck to their mandate (infrastructure, police, courts, military, etc), they could work with much less tax revenue. Beside, a progressive tax system is ultimately destructive to the nation as a whole.

        • Ubik2501 says:

          @t-r0y: I agree that there needs to be a lot less pork going on in our government, but I think a certain level of regulation is necessary to keep the market working and beneficial for people at all levels of income. I would also disagree with your final statement and would like to know what grounds you have for it.

          • t-r0y says:

            @Ubik2501:

            I agree that there needs to be a lot less pork going on in our government…

            A lot less? So you’re okay with politicians using our money for the benefit of their constituents?

            … but I think a certain level of regulation is necessary to keep the market working…

            I agree with that. We need laws and regulations to define an even playing field. But I don’t like laws or regulations that favor an individual class or industry (e.g. The Community Reinvestment act [en.wikipedia.org] , Union-Only Project Labor Agreements [www.whitehouse.gov] , Farm Subsidies [en.wikipedia.org]).

            I would also disagree with your final statement and would like to know what grounds you have for it.

            Simply put … it’s a direct removal of capital from the free market. It’s the high income earners, and EVERYONE has that opportunity, that are the ones with the capital to invest in the future. When the government confiscates that capital, it’s generally wasted, spent fraudulently, or mal-invested.

    • chargernj says:

      @Bladefist: The wealthy need to pay more because they use more resources. The corporate tax code is a joke and filled with loopholes that ensure the the corporations that enjoy many of the benefits of “citizenship”, while writing off the responsibilities. So these huge companies benefit from things like infrastructure, police protection, a somewhat educated workforce, etc while not paying a proportionate share of taxes for these things. So if we can’t tax the companies that are the largest and possible most disproportionate benificiaries of the nations resources then we have to get it from those who own the companies.

    • ARP says:

      @Bladefist: I’m a bit disappointed. I disagree with you on most stuff, but you’re generally well reasoned and don’t resort to (too many) cheap shots. Democrat? No such thing. There’s the Democratic party or there are Democrats; there are no democrat politicians. Democrat party is sort of dog whistle way of insulting Democrats (see the grammar distinction)while having plausable deniability that it was just a slip of the tongue (or keys) BTW- Same with Rethuglican and similar names. Save that for your powerline, redstate, dailykos, etc. comments.

      • Bladefist says:

        @ARP: I said that because of the 3 Obama nominees who haven’t paid their taxes. It was a jab, and It made sense because of recent events.

        I should have been more specific. I wasn’t trying to make a sweeping comment about all democrats.

        • johnva says:

          @Bladefist: For the record, I don’t approve of Obama nominating these asshats with tax problems. I was happy when Daschle was withdrawn (also, because I believe he is a tool of the health insurance industry). Surely he could find someone qualified who isn’t an idiot who doesn’t pay their taxes, no argument there. But, to be fair, I would bet that a LOT of the rich people in DC have “tax problems” of this sort. We have a culture of corruption permeating our elite class on both sides of the political spectrum.

      • Bladefist says:

        @ARP: As far as the “democrat” grammar…Don’t look too much into that. It’s not meant to be an insult when I say democrat.

        • johnva says:

          @Bladefist: If you don’t mean to insult all Democrats, you probably shouldn’t use that ungrammatical phrasing in the future. A lot of people will find it insulting because of the way Bush used it to denigrate his opponents.

    • BreadBoy says:

      @Bladefist: Mod poster down: comment troll

    • StreamOfConsciousness says:

      @Bladefist: Uhhmmm…..ever heard of Sarah Palin??

  23. vastrightwing says:

    Proper headline:
    UBS Will Release screened Names Of Americans Hiding Money From IRS

  24. radiochief says:

    For the tax prep cheaters issue:

    A tax preparer is only responsible for a person’s return if they sign it as a paid preparer. Furthermore, due diligence for tax preparers is pretty low.

    If you suspect a person is deceitful, you can refuse to continue a return and direct them to another preparer, or better yet– just ask them to leave the office. If you feel the client is making a good faith effort, you must advise them that they must have written records in case the IRS ever comes knocking.

    The difference also may be if you knowingly helped the client defraud the gov’t or did it on your own behest. The latter is easier if you are accountant/bookeeper/CPA because usually you are the one to tally up receipts…

    The problem with tax cheats and especially with EIC cheats is that there is not a lot of incentive to be on the up and up. I worked for the ‘green square’ and where I live all the green squares are company-owned. But, in other areas of the country these green squares may just be o/o franchises. Fraud is more pervasive because the fees generated from these EIC returns are incredible:

    1) Costs more to do EIC (more forms–higher fees)
    2) In my personal experience as a tax preparer, 98-99% of these return used quick money refunds. Sure the usery fees are insane… But so what if you pay an extra $200 (plus tax prep fees) to get your money back tomorrow, when you are getting $4000 from the government??!
    3) With nat’l companies who offer these types of products, bonuses/incentives for all employees are based on those figures, not entirely… but a decent portion.

  25. Silversmok3 says:

    Haha.They settle to avoid indictment regarding mass tax evasion, then try to ‘vigerously fight’ the IRS’s request to hand over more names-as if they have a choice.

    UBS fought the law, and the law won.

  26. starrion says:

    Wait till the IRS gets hold of this list and cross-references it.

    It should be noted that the IRS does not use lube on habitual tax evaders.

    “Who’s your auditor! Who’s your auditor!”

  27. redkamel says:

    I hope this doesnt end an era of dreams and movie plots where there is a giant fortune, ransom to be paid, or secret equipment hidden in an offshore account or a swiss bank.

    “Deposit 1 million dollars into my Vanguard ROTH IRA by midnight tonight, or she dies.” Doesnt quite have the same ring.

  28. bubby1124 says:

    This is why the we should enact the ‘Fairtax’ system. No more being able to hid your assets because you only pay taxes on the stuff you buy, no way around it.

  29. DeltaTee says:

    In a break with their corporate privacy policy, a large banking company is set to release records for thousands of people. And the people are…rejoicing? What is this world coming to?

    • ninjatoddler says:

      @DeltaTee: You forgot to include the part where these people are directly in gross violation of federal laws. That in my book is definitely anti-America.

  30. varro says:

    Hiding money in Swiss bank accounts is tantamount to treason. Support the troops, but don’t pay them!

    It definitely *is* tax evasion.