The IRS Continues to Connect The Dots

25 Aug

IRS vs EXPATS connect the dotsThe IRS has caught another thief, and this time, another big one who is the lynchpin to many millions of dollars being hidden by Americans who are tax evaders. But before we address this group of thieves, let me emphasize that they are, as far as is know to me, NOT EXPATS. They are American Persons who reside in America. Nonetheless, their attempted, and up until now successful, evasion of taxes by using foreign bank accounts, will result in the IRS more aggressively pursuing the thieves and in the process, cause we EXPATS a great deal of grief through FATCA, FBAR, and the like. To be truthful, there is, that we know of, one expat involved in this case, and that is the lynchpin himself, who holds dual citizenship in Switzerland, where he lives, and in the United States.

According to the indictment listed on the Federal Court website, Edgar Paltzer, this Swiss lawyer has pleaded guilty to charges of conspiring to defraud the United States of America in collection of revenue, stating that he “intentionally formed foundations and corporations which permitted these U.S. Taxpayers to hide from the IRS these accounts and the income earned in these accounts. I assisted these taxpayers in violating their legal duties. I was aware that this conduct was wrong.” When some Swiss banks were closing offshore accounts, he helped these thieves move their money to his bank, which is only referred to as Bank No. 1 in the indictment. Wouldn’t you know it? Paltzer is the law partner of the founder and chairman of the board of directors of Swiss Bank No.1. And 44% of the Assets Under Management of this bank belonged to U. S. citizens living in the United States.

Paltzer had control of, and access to, bank vaults in Zurich, where U.S. taxpayers had stashed assets and valuable. He helped dozens of US Persons maintain undeclared Swiss accounts with millions and millions of dollars in undeclared assets. The indictment also includes another Swiss Bank No 1 official Stefan Buck who told one of these American thieves that he did not need to reveal his account to U.S. Authorities because Swiss Bank No 1 operated exclusively in Switzerland and the U.S. tax rules did not apply to Swiss Bank No 1.

We know about Wegelin, the Swiss bank that was indicted for helping American thieves evade taxes. But Swiss bank No. 1 was part of this web of thieves. One of Wegelin’s partners was a managing director of Swiss Bank No. 1. Wegelin provided “back office” transfers for the thieves who had set up sham foundations set up in Liechtenstein, Panama, British Virgin Islands, among other places, in order to conceal the ownership of these accounts by the thieves, as well as income generated in these accounts. On July 31, Liechtensteinische Landesbank AG, the oldest bank in Liechtenstein, avoided prosecution by the United States by agreeing to pay $23.8 million and admitting it helped clients hide as much as $341 million from the IRS.

It is quite clear that the American thieves who were the clients of Paltzer and Buck will be arrested, indicted, tried, fined and no doubt, some even imprisoned. We hope that the IRS will realize that there are two types of US Persons that should not be lumped together. The first are typified by these clients of Paltzer and Buck are Americans who live in the United States and send their illegal millions of dollars to hide in Swiss banks and other offshore accounts. These are the thieves that are evading taxes and defrauding the United States of America of revenues. The second type of US Person is those Americans who live and work overseas and are referred to as EXPATS. This type is law abiding and does not willfully conceal income in an attempt to evade taxes. As long as this differentiation is not made, many small fish EXPATS will continue to be hounded and harassed by the IRS. Here, some of the big fish thieves were caught. But how many continue to stay out of the reach of the IRS is completely unknown. We applaud the efforts of the US authorities who flush out the big fish, the non-EXPATS who live in the United States and send their stolen dollars out of the country in an attempt to defraud the country of revenues that are due to it.

Link for indictment:

http://www.justice.gov/usao/nys/pressreleases/April13/PaltzerandBuckIndictmentPR/Paltzer,%20Edgar%20and%20Stefan%20Buck%20Indictment%2013%20Cr%20282.pdf

 

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