Recent Updates
April 15, 2010
Obama Raises Tax Rates on Top Earners Instead of Renewing Tax Cuts
April 15, 2010
Obama to Crack Down on Tax Evaders through Contracts
April 15, 2010
Germany Considers Paying for Information that Leads to 1,500 Tax Evaders
April 15, 2010
Former Swiss Banker Offers Up Valuable Information on Swiss Banking Giant, Julius Baer
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Brown, PC is an experienced firm which provides sophisticated counsel and representation. The firm, founded in 1992, boasts 20 years of collective experience. They have favorable client outcomes in both civil and criminal matters. They represent clients throughout the United States. Because of their central location, in Dallas-Fort Worth, they are less than four hours away by air to every major city in the continental United States.
Obama Raises Tax Rates on Top Earners Instead of Renewing Tax Cuts
April 15, 2010
Topic: New Legislation and Your Taxes
The tax cuts that former President George W. Bush enacted will expire at the end of 2010. While some people would continue to enjoy these tax cuts, others would not, under the budget plan proposed by President Obama. Individuals earning more than $200,000 a year ($250,000 for married couples) will return to top marginal tax rates of 36% and 39.6% from 33% and 35% at present.
Taxes on high-income earners will likely raise $1 trillion over the next 10 years and the current administration is looking for every penny it can find to pay back the deficit that it is accumulating. President Obama is, therefore, foregoing a renewal on tax cuts for top income earners as set forth in a new budget plan proposed on Monday February 1, 2010.
Below are some aspects of the proposed new budget plan that would increase income tax rates and directly affect top income earners:
1. Top marginal tax rates would rise from the 33% and 35% now to 36% and 39.6%.
2. Capital gains and dividends would be taxed at 20% instead of 15%.
3. Limits would be imposed on upper-income earners' abilities to claim personal exemptions itemized deductions.
4. Fund managers would see their partnership profits taxed at ordinary income rates, rather than the lower capital-gains rate that is currently in place.
5. Limits would be put on the use of family trusts that have helped wealthy families lower their estate-tax liabilities. This tax increase was proposed after the White House estimated that it would increase government revenue by $23.7 billion over the next 10 years.
6. Estate tax of 45%, with an exemption for estate wealth under $3.5 million, and extension of those rates permanently.
President Obama did try to sweeten the deal for middle income tax earners, though, by requesting the payroll tax credit that lined workers pockets last year be made permanent. Mr. Obama reconsidered, however, and the final proposal put forth on Monday had dropped this particular request.
Time will tell how this year's budget plan will fare in the House and Senate. Last year's proposal passed in the House, but was halted in the Senate by both parties due to worry about the results the proposal would have on entrepreneurship and investment. The proposal was also met by resistance from realtors, charities, lawmakers, and other powerful, wealthy individuals.
Obama to Crack Down on Tax Evaders through Contracts
February 16, 2010
President Obama, in a January 21, 2010 press conference at the White House, announced that the Federal government would no longer award contracts to companies that did not pay their taxes.
Further, Obama has urged Congress to pass legislation that would allow the IRS to share information about businesses that do not pay their taxes. Studies conducted through the Government Accountability Office show that tens of thousands of companies owe the government, collectively, more than $5 billion in back taxes. As stated by Mr. Obama in the press conference, "All across this country, there are people who meet their obligations each and every day. You do your jobs. You support your families. You pay the taxes you owe-because it's a fundamental responsibility of citizenship. And yet, somehow, it's become standard practice in Washington to give contracts to companies that don't pay their taxes."
The presidential memorandum that Mr. Obama enacted on January 21st allows the budget office, the Treasury Department and the IRS to block contractors with serious tax delinquencies from doing business with the government. In addition to the above mentioned stipulations, President Obama also directed the IRS to initiate a review of the way it evaluates companies' claims that they are not delinquent. They are to report their findings in 90 days to prove and insure the IRS's accuracy in these claims against businesses.
Obama to Crack Down on Tax Evaders through Contracts
April 15, 2010
Topic: New Legislation and Your Taxes
President Obama, in a January 21, 2010 press conference at the White House, announced that the Federal government would no longer award contracts to companies that did not pay their taxes.
Further, Obama has urged Congress to pass legislation that would allow the IRS to share information about businesses that do not pay their taxes. Studies conducted through the Government Accountability Office show that tens of thousands of companies owe the government, collectively, more than $5 billion in back taxes. As stated by Mr. Obama in the press conference, "All across this country, there are people who meet their obligations each and every day. You do your jobs. You support your families. You pay the taxes you owe-because it's a fundamental responsibility of citizenship. And yet, somehow, it's become standard practice in Washington to give contracts to companies that don't pay their taxes."
The presidential memorandum that Mr. Obama enacted on January 21st allows the budget office, the Treasury Department and the IRS to block contractors with serious tax delinquencies from doing business with the government. In addition to the above mentioned stipulations, President Obama also directed the IRS to initiate a review of the way it evaluates companies' claims that they are not delinquent. They are to report their findings in 90 days to prove and insure the IRS's accuracy in these claims against businesses.
Germany Considers Paying for Information that Leads to 1,500 Tax Evaders
April 15, 2010
Topic: International/Offshore
The newest one-two punch is being served by none other than Germany. German authorities are currently in negotiations with a confidential informant who is offering to sell them information on about 1,500 German offshore account holders. The confidential informant is willing to sell the information for the not so small amount of $3.5 million. German authorities have taken samples of the information and believe it to be credible.
A member of Germany's business-friendly Free Democratic Party and chairman of the German parliament's finance committee, Volker Wissing, confirmed that a decision regarding the purchase will be made at a hearing on February 10, 2010. Wissing added that "the sale of stolen goods is a crime, but any legal means of obtaining important evidence should be considered with an open mind".
Other German officials are slightly more skeptical about the information. Michael Fuchs, the Deputy Parliamentary Party Chairman and a member of Chancellor Angela Merkel's conservative Christian Democratic Union, argued that "It would not be proper for the German government to purchase stolen property and that Germany should press Switzerland to provide evidence of tax fraud through the process of international legal assistance."
The Swiss Bankers Association reacted sharply to the news of the latest assault on their banking system and issued a statement warning Germany to return the information as the Swiss believe it to be stolen banking data. A spokesperson for Germany's finance ministry stated that a decision on the purchase of evidence would be made after state government officials conclude a preliminary investigation into the background of the data in question. This is not the first purchase by Germany of stolen information in the attempts to limit offshore account secrecy. In 2008 German's foreign intelligence service paid Heinrich Kieber, a former bank employee at LGT Group, for stolen account files from LGT Treuhand AG.
German officials believe that the information could lead to a substantial gain, however. Although the earlier match up with America drew a great deal of attention, Americans with offshore accounts represented no more than 5% of the $1.8 trillion that is said to be tied to Swiss secrecy banking. German officials, on the other hand, claim that their country has around $175 billion in Swiss accounts which adds up to about 10% of the total; almost double the amount of the Swiss's most recent accusations.
Germany is not the first country to pressure Switzerland into handing over information about tax evasion. The American government has begun an in depth investigation into the accusations brought forth by several whistle-blowers. Italy launched a tax amnesty program that gained them about €80 billion in hidden money. And last fall, the French government got their hands on stolen data from an employee of HSBC Holdings PLC. The French have since then come to an agreement with the Swiss government that they would not use the stolen data to track down tax evaders.
With several nations out on the hunt for hidden tax money, other tax secrecy nations should take note based on the pressure and fire that Switzerland has been facing over the past few years. Eventually the craze to find tax evaders will spread to other countries like wild fire. Where there's a fire, there will be whistle-blowers waiting to cash in on the rewards to be had by providing valuable information to governments around the world.
Former Swiss Banker Offers Up Valuable Information on Swiss Banking Giant, Julius Baer
April 15, 2010
Topic: International/Offshore
Rudolf Elmer, originally from a quaint village outside of Zurich, had been managing the Caribbean locations of Julius Baer since 1994 where he handled transactions from Switzerland to the Caribbean, but he had been working for Julius Baer for nearly two decades. That is until he was fired in 2002. His first 15 years of working for Julius Baer were spent in Switzerland before he became the chief operating officer of Julius Baer Bank and Trust in Grand Cayman. Now back in Switzerland, Mr. Elmer has been carefully navigating his way through almost a decade's worth of knowledge about his former employer. The result, says Elmer, is centuries-old secrets at the tip of his fingers. In a recent e-mail from Mr. Elmer, he wrote "It is a global problem, and I am the only messenger who provides the bad news, or even better, the truth. Offshore tax evasion is the biggest theft among societies and neighbor states in this world."
Julius Baer, based in Zurich, is a 120-year-old private bank. In 2009, Baer had profits of more than $245 million in the first half of the year alone. Julius Baer sold its American wealth management business to UBS in 2004. UBS is now under investigation by the IRS and was recently fined $780 million in 2009 for criminal wrongdoing and involvement in helping clients evade taxes through offshore investing.
Mr. Elmer is included with other whistle-blowers in an effort by the IRS to uncover the banking institutions that have helped clients evade billions of dollars in taxes by routing money through offshore havens in the Caribbean and Switzerland, among other tax havens throughout the world. The other most recent whistle-blower is Bradley Birkenfeld, the former UBS banker who came forth with UBS's secrets which ultimately resulted in a settlement between UBS and the U.S. government. Along with Birkenfeld is Heinrich Kieber, a former LGT Group data clerk who stole data from the Liechtenstein royal bank and funneled the information to authorities in countries at risk including the United States.
The documents that Mr. Elmer has gathered have been turned over to the IRS, and are drawing particular interest at the Department of Justice. The IRS is employing a "it takes a rogue to catch a thief" strategy in hopes that more insiders will come forward with crucial information that will put a stop to international tax evasion. Those who have seen Mr. Elmer's disclosures confirm that these documents provide fresh ammunition for American authorities as they begin to expand their investigation to other havens, countries, and international banking institutions.
Mr. Elmer's disclosures include information on more than 100 trusts, dozens of companies and hedge funds, and more than 1,300 individuals in the years spanning from 1997 through 2002. He contends that his documents show that American investment management companies have been funneling American, European, and South American client's money to Julius Baer in order for said clients to avoid paying taxes. Furthermore, there is evidence of backdating the same documents to establish trusts and foundations to evade taxes. And finally, his disclosures will show the funneling of trades for hedge funds and private equity firms in high-tax jurisdictions to Julius Baer entities on the Cayman Islands.
Julius Baer denies Rudolf Elmer's claims that they are involved in such practices and claims that Elmer stole internal documents in order to raise concerns about the bank due to being passed over for a promotion. Respite of being jailed by Swiss authorities, Elmer published some of his documents on Wikileaks, a site devoted to whistle-blowing information about government and corporate activity.
The United States and other countries seeking the demise of international banking secrecy are hoping that by publicly making examples out of major financial institutions like UBS and Julius Baer, other whistle-blowers like Elmer and Birkenfeld will come forward and disclose information that will lead to the breakdown of international tax evasion and international banking secrecy. Elmer is definitely not the first person to disclose valuable information on a banking giant and thanks to the IRS's recent interest in tracking down offshore account holders, he will most likely not be the last informant either.
