Thursday, December 29, 2011
Reuters, New US Tactic for Suspected Swiss Bank Tax Cheats, by Lynnley Browning:
U.S. authorities hunting in Swiss banks for suspected tax cheats have a new weapon in their arsenal: an arcane but aggressive legal manoeuvre more commonly used against drug smugglers, money launderers and Imelda Marcos, widow of the Philippine dictator.
Backed by court judges, federal prosecutors are issuing subpoenas -- official papers which compel the recipients to provide potentially damning evidence -- to United States taxpayers suspected of holding hidden accounts at Swiss and other offshore banks, according to criminal defence lawyers whose clients have received the papers.
The grand jury subpoenas are unusual in that they ask bank clients -- not the banks themselves -- to turn over to the authorities their bank account details since 2003, including statements with the highest annual balances. Taxpayers who refuse to comply potentially face a stark choice: be found in contempt of court and thus subject to civil or criminal fines and jail time, or disclose potentially incriminating evidence against themselves.
"This is a very hot issue right now," said Nathan Hochman, former assistant attorney general for the Tax Division of the Justice Department who is now in private practice at the law firm Bingham McCutchen. Hochman said that defence lawyers representing taxpayers were furious over the tactic, which already has been challenged in some courts.
(Hat Tip: Francine Lipman, Ann Murphy.)