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International News Title: Rand Paul Seeks to Block Tax Treaty Change on Swiss Accounts Senator Rand Paul is blocking an amendment to a U.S.-Swiss tax treaty, slowing Switzerlands handover of data on thousands of Americans with bank accounts hidden from the U.S. Internal Revenue Service. The protocol, negotiated in September 2009, would amend a 1996 treaty and make it more difficult for Switzerland to refuse requests from the IRS for tax information about U.S. customers of Swiss banks. The U.S. is cracking down on secret accounts held by its citizens at UBS AG (UBSN), Credit Suisse AG (CSGN), Wegelin & Co. and other financial institutions. Paul, a Kentucky Republican, said the protocol is too sweeping and would threaten protections under the Fourth Amendment to the U.S. Constitution, which guards against unreasonable search and seizure. Paul said he is exercising his privilege to delay a Senate vote. Were concerned about the due process of whether or not people have any kind of process before their records are looked at, the privacy of your banking records, Paul said in an interview last week. There needs to be some constitutional protections to your banking records. President Barack Obama sent the protocol to the Senate in January 2011, and the Foreign Relations Committee approved it July 26. Paul, a critic of the IRS who won his seat in 2010 with the backing of the Tea Party movement, could require Democrats who control the Senate to spend a week of floor time before voting to ratify the protocol, which requires assent by two- thirds of the senators. He said his office discussed changes with the Swiss ambassador. The hard part about finding a compromise is its a treaty and I dont know that theyre willing to rewrite the treaty for me, Paul said. But I dont know any easy way out of the situation. Under the current treaty, the Swiss can grant a U.S. request seeking data on a taxpayer suspected of tax fraud and the like, which involves acts such as using false documents or third parties to disguise account ownership. The Swiss wont hand over data if taxpayers are suspected of evasion, a view upheld April 5 by the Swiss Federal Administrative Court. The new U.S.-Swiss protocol includes language that would prevent Swiss officials from denying an information request on the grounds that it would violate domestic bank-secrecy laws. The protocol would allow the U.S. to request account data without specifying taxpayers by name. While Switzerlands lawmakers approved amending the treaty, the countrys federal government wont ratify the protocol until both countries agree on a solution that ends negotiations on the investigation of Swiss banks, Finance Minister Eveline Widmer- Schlumpf said before a vote in the Swiss parliament on March 5. Switzerland will grant administrative assistance, including for group requests, in cases where the U.S. tax authorities produce clear evidence of a suspected offense by a bank and can detail a pattern of behavior, according to the amendment. Philip West, a former international tax counsel at the U.S. Treasury Department during President Bill Clintons administration, said Pauls move to block the treaty amendment is impairing the U.S. crackdown on offshore tax evasion. Its wrongheaded, its inappropriate, said West, a partner at Steptoe & Johnson LLP in Washington. Whether this is the senators motive or not, it smacks of protecting financial secrecy for those who may have committed criminal tax fraud in the U.S. Paul, he said, misconstrues the nature of whats going on in that treaty and the right of the tax inspector to review the books and records of persons who might be subject to taxation. West said the constitutional right of the agency to review such records has never been questioned by U.S. courts. Senator John Kerry, chairman of the Foreign Relations Committee, said failure to ratify the protocol hurts the U.S. overseas. The consequences are that we are losing credibility globally, in terms of our accountability, said Kerry, a Massachusetts Democrat. Nathan Hochman, a former assistant attorney general who oversaw the Justice Departments tax division, said he applauds Pauls concern for taxpayers privacy. Too often in the pursuit of these records, the account holders privacy is not fully considered in figuring out processes to obtain these records for government investigations, said Hochman, who was appointed by President George W. Bush and is now a partner at Bingham McCutchen LLP in Santa Monica, California. The current treaty, he said, lets the U.S. pursue records through mutual legal assistance treaties and tax information exchange agreements. They provide the government with more than enough horsepower to obtain the records they are seeking, Hochman said. The IRS wants to make it easier for sweeping looks at records, and Im always a little bit worried about sweeping, sifting through millions of records looking for things, Paul said. If youre accused of a crime, someone ought to have some evidence before they go sifting through your records. Tax attorney William Sharp, who represents clients with foreign accounts, said Pauls objections to the protocol will hurt the U.S. enforcement of tax law. Were losing global credibility by mandating treaty concessions, obtaining those concessions, and then not approving them for almost three years, said Sharp of Sharp Kemm PA of Tampa, Florida. What Senator Paul and others dont recognize is that the use of bank secrecy puts the IRS at a special disadvantage. When you go offshore, youre off the radar. Switzerland, the worlds biggest center for offshore wealth, is trying to change its image as a haven for undeclared assets following a crackdown on tax evasion by U.S. authorities. The Justice Department and IRS have sought the treaty change as they have conducted criminal probes of 11 Swiss financial institutions. The U.S. crackdown on offshore tax evasion picked up in 2009, when prosecutors charged UBS, the largest Swiss bank, with aiding tax evasion by U.S. clients. UBS avoided prosecution by paying $780 million, admitting it fostered tax evasion, and giving the IRS data on more than 250 accounts. It later turned over data on another 4,450 accounts. Prosecutors have since filed criminal charges against at least 21 foreign bankers, advisers and attorneys and about 50 U.S. taxpayers. The clients banks included UBS; Zurich-based Credit Suisse, the second-largest Swiss bank; and London-based HSBC Holdings Plc (HSBA), Europes largest bank, prosecutors said. On July 15, Credit Suisse said it was a target of a criminal probe over former cross-border private-banking services for U.S. customers. Six days later, seven current and former Credit Suisse bankers were indicted on a charge of conspiring to help U.S. clients evade taxes through secret accounts. Prosecutors also secured an indictment on Feb. 2 against Wegelin & Co., the 270-year-old private bank that was the first Swiss lender to be criminally charged. The IRS said 33,000 U.S. taxpayers with offshore accounts have avoided prosecution since 2009 by entering a limited amnesty program, paying back taxes and identifying those who helped them hide their accounts from authorities. Hundreds of taxpayers in the program gave prosecutors information that has helped build criminal cases against bankers and advisers. HSBCs Swiss private bank has provided lists of employees to assist the U.S. with investigations into tax evasion, a Geneva-based spokesman for the firm said yesterday. The debate over the Swiss protocol comes as the administration seeks to implement the Foreign Account Tax Compliance Act, or FATCA. Congress passed the measure as part of a jobs package in 2010. It is estimated to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation. FATCA bypasses other governments and applies to non-U.S. banks. The banks must report the identities of their U.S. customers to the IRS and withhold money from the accounts of customers who dont provide enough information. Charles Miller, a Justice Department spokesman, declined to comment on Pauls opposition to the protocol. Dean Patterson, an IRS spokesman, and Sabrina Siddiqui, a Treasury spokeswoman, declined to immediately comment.
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#1. To: Brian S (#0)
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Bravo for Rand Paul. The U.S. government is the only government in the world that arrogantly claims global jurisdiction over taxes, the use of military power, and a host of other things. The power mad politicians have to be stopped.
Obama has no regard for the sovereignty of nations, or States. He believes that he's ruler over all, the great decider. He wants to have his Marxist vampires steal granny's swiss bank account, and push her wheelchair down the stairs.
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
The U.S. government is the only government in the world that arrogantly claims global jurisdiction over taxes, the use of military power, and a host of other things. The power mad politicians have to be stopped. You greedy capitalist bastards want everything your way. It's not enough that the US goes around the world with the most expensive military in the world making markets safe for the sale for your mostly useless crap? You want the little guys to pay for that too?
Almost every country in the Middle East is awash in oil, and we have to side with the one that has nothing but joos. Goddamn, that was good thinkin'. Esso posted on 2012-01-13 7:37:56 ET
You want the little guys to pay for that too? We also want to put you in a wax museum.
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