There is an accusation that the former head of a major Swiss bank has been conspiring to assist wealthy Americans in tax evasion. The government already offers taxpayers a solution to get current with back taxes owed from holding in an offshore account, and it’s a requirement that concerns more Americans looking for methods to shelter income for retirement.
The latest casualty of the sting operation was a Mr. Raoul Weil. Indicted for evasion in October 2008, Weil was fired from UBS before he continued his work for a smaller bank in Switzerland. A master of six different spoken languages, Weil was the perfect person to orchestrate this level of international fraud. He was declared a fugitive shortly after, and is among 100 people charged for evasion since 2008.
Weil was arrested in Bolgna, and was extradited to the US. He and his criminal tax attorney will face a federal court where he is expected to plead guilty.
Since 2007, the U.S. Federal Bureau of Investigation has been part of a multi-million-dollar tax evasion sting. It all started when UBS bankers considered making some key disclosures. Among the organizations hearing these testimonies were the US Department of Justice, the US Securities and Exchange Commission, and the US IRS.
The indictment for Mr. Weil paints a picture of billions in assets, but he is not the only one affected by these changes. New laws will require individuals to retain a specialized tax lawyer IRS who knows and understands the laws.
The IRS has been working with over 50 countries since then in an attempt to share financial information. The hope is that the federal government can uncover more of these offshore holdings, and claim back taxes from violators.
The practice of sheltering money offshore has been commonplace for a while. Typically, a wealthy individual puts money into a dummy corporation, and manages it like an investment. The banks overseas handled all the funds, and tax rates were lower than the US so the benefits outweighed the costs.
What changed? The answer has to do with financial leverage. Previously, banks stood to gain more from assisting these US based accounts for the commissions, but the threat of shutting these institutions out of the US market has forced compliance.
Still, this is not a death blow to your retirement account. You can use 401ks, IRAs and strategic investments to grow your money through alternative means. Even life insurance policies can be structured to allow for withdrawals in an emergency.