Student Researcher: Valerie Janssen
Faculty Evaluator: BC Franson, J.D.
Southwest Minnesota State University
Swiss banking giant, Union Bank of Switzerland (UBS) enabled wealthy Americans to use tax schemes to cheat the IRS out of $20 billion over recent years according to the Department of Justice. UBS, a sponsor of the Miami Art Basel took advantage of this opportunity by building relationships that enabled the wealthy to find ways to avoid paying into the IRS. UBS also made money taking on clients looking for advice on tax shelters and how to take advantage of bank secrecy rules in Switzerland and Lichtenstein.
A study done by the GAO (Government Accountability Office) in 2008 uncovered 83 of the top publicly held U.S. companies have operations in tax havens like the Cayman Islands, Bermuda, and the Virgin Islands. 14 of these companies, AIG, Bank of America, and Citigroup included, received money from the Obama stimulus bailout. The GAO also reported that activities of UBS at the Art Basel are directly connected to tax avoidance.
UBS stands firm that their guarantee of banking privacy will survive this ordeal. Faced with the pressure of cutting the deficit in half by 2012, Obama’s administration should focus on UBS and other overseas companies helping wealthy Americans rip off the IRS.
“International Taxation: Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Juridictions”
GAO U.S. Government Accountability Office, December 18, 2008
“Gimme Shelter: Tax Evasion and the Obama Administration” Thomas B. Edsall, The Huffington Post, February 23, 2009 http://www.huffingtonpost.com/2009/02/23/gimme-shelter-tax-evasion_n_169084.html