Levin Calls for Closing Down UBS
By WebCPA staff

  As a Senate subcommittee and the Internal Revenue Service probe the use of Swiss bank accounts as tax havens by UBS, Sen. Carl Levin, D-Mich., has called for revoking the U.S. banking license of UBS.

"I don't think that any bank that goes to the extent that UBS has gone through to avoid doing what their what their agreements with the United States require them to do, should be allowed to continue to do business unless they clean up their act," Levin ... told ABC News.

Levin's Permanent Subcommittee on Investigations held a hearing Thursday on tax haven banks and U.S. tax compliance. The committee has produced a report on its six-month-long investigation.

The investigation examined LGT Bank in Lichtenstein and UBS in Switzerland to expose how tax haven banks are helping U.S. taxpayers evade taxes by urging U.S. clients to open accounts in their offshore jurisdictions, assisting them in structuring those accounts to avoid disclosure to U.S. authorities, and providing financial services in ways that do not alert U.S. authorities to the existence of the foreign accounts.

The IRS has been looking into the possibility of closing tax loopholes that allow clients of foreign banks to avoid the Qualified Intermediary rules for reporting their holdings in the accounts. Banks have been setting up sham transfer companies and foundations to help customers hide their assets.

From the Report: (It is not an honor to be in this one)

                             TAX HAVEN ABUSES:
                   THE ENABLERS, THE TOOLS, AND SECRECY

TABLE OF CONTENTS
TAX HAVEN ABUSES:
THE ENABLERS, THE TOOLS, AND SECRECY
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
A. Subcommittee Investigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
B. Overview of Case Histories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
C. Findings and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Report Findings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

1. Control of Offshore Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   
2. Tax Haven Secrecy  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   
3. Ascertaining Control and Beneficial Ownership  . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   
4. Offshore Tax Haven Abuses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   
5. Anti-Money Laundering Abuses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   
6. Securities Abuses   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   
7. Stock Option Abuses   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   
8. Hedge Fund Transfers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   

Report Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

1. Presumption of Control  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   
2. Disclosure of U.S. Stock Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   
3. Offshore Entities as Affiliates  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   
4. 1099 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   
5. Real Estate and Personal Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   
6. Hedge Fund AML Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   
7. Stock Option-Annuity Swaps  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   
8. Sanctions on Uncooperative Tax Havens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   

II. THE OFFSHORE INDUSTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
III. EDG CASE HISTORY: AN INTERNET-BASED OFFSHORE PROMOTER . . . . . . . . . . . . . . 17
IV. TURPEN-HOLLIDAY CASE HISTORY: A HOW-TO MANUAL . . . . . . . . . . . . . . . . . . . . . . 29
V. GREAVES-NEAL CASE HISTORY: DIVERTING U.S. BUSINESS INCOME OFFSHORE  . . . . 42
VI. ANDERSON CASE HISTORY: HIDING OFFSHORE OWNERSHIP . . . . . . . . . . . . . . . . . .  49
VII. POINT CASE HISTORY: OFFSHORE SECURITIES PORTFOLIO . . . . . . . . . . . . . . . . . .  55