United States Senate
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
Committee on Homeland Security and Governmental Affairs
Carl Levin, Chairman John McCain, Ranking Minority Member
OFFSHORE TAX EVASION:The Effort to Collect Unpaid Taxeson Billions in Hidden Offshore Accounts
MAJORITY AND MINORITYSTAFF REPORT
PERMANENT SUBCOMMITTEEON INVESTIGATIONSUNITED STATES SENATE
RELEASED IN CONJUNCTION WITH THEPERMANENT SUBCOMMITTEE ON INVESTIGATIONSFEBRUARY 26, 2014
SENATOR CARL LEVINChairmanSENATOR JOHN McCAINRanking Minority MemberPERMANENT SUBCOMMITTEE ON INVESTIGATIONS
ELISE J. BEAN
Staff Director and Chief Counsel
ROBERT L. ROACH
Counsel and Chief Investigator
ALLISON F. MURPHY
Counsel
ANGELA MESSENGER
Detailee
JOEL CHURCHES
Detailee
MARY D. ROBERTSON
Chief Clerk
ADAM HENDERSON
Professional Staff Member
HENRY J. KERNER
Staff Director and Chief Counsel to the Minority
MICHAEL LUEPTOW
Counsel to the Minority
ELISE MULLEN
Research Assistant to the Minority
BENJAMIN DRISCOLL
Law Clerk
ELIZABETH FRIEDRICH
Law Clerk
JACOB ROGERS
Law Clerk
MEGAN SCHNEIDER
Law Clerk
ALEX ZERDEN
Law Clerk
Former Subcommittee Staff Who ContributedANDREW DOCKHAM
Counsel to the Minority for Senator Tom Coburn
DENNIS BOGUSZ
Congressional Fellow
ELENA BEGUNOVA
Law Clerk
GIGI GOOD
Law Clerk
THARUNI JAYARAMAN
Law Clerk
JULIE KOVIN
Law Clerk
LANE POWELL
Law Clerk
DYLAN TEGGERT
Intern
DORIS WEIL
Law Clerk
2/25/14 (1335)
Permanent Subcommittee on Investigations
199 Russell Senate Office Building – Washington, D.C. 20510 Majority: 202/224-9505 – Minority: 202/224-3721Web Address: http://www.hsgac.senate.gov/subcommittees/investigations
OFFSHORE TAX EVASION:The Effort to Collect Unpaid Taxes on Billionsin Hidden Offshore AccountsTABLE OF CONTENTS
I.EXECUTIVE SUMMARY
................................................. 1
A.Subcommittee Investigation
. . . ........................................... 2
B.Investigation
Overview.
. ................................................ 2
C.Findings of Fact and Recommendations
. . . ................................. 6 Findings of Fact:(1)Bank Practices that Facilitated U.S. Tax Evasion. . ........................ 6(2)Inadequate Bank Response. . . ........................................ 6(3)Lax U.S. Enforcement. . . ............................................ 7 (4)Swiss Secrecy. . .................................................... 7Recommendations:(1)Improve Prosecution of Tax Haven Banks and Hidden Offshore Account Holders. . . ................................................ 7(2)Increase Transparency of Tax Haven Banks That Impede U.S. Tax Enforcement. 7(3)Streamline John Doe Summons. . . ..................................... 7(4) Close FATCA Loopholes. ........................................... 8(5)Ratify Revised Swiss Tax Treaty. ..................................... 8
II.BACKGROUND
......................................................... 9
A.U.S. Tax Initiatives To Combat Hidden Foreign Accounts
.................... 10
B.Multinational Tax Efforts To Combat Hidden Foreign Accounts
............. 22
C.Switzerland
........................................................... 30
III.CREDIT SUISSE: CASE STUDY IN SWISS SECRECY
....................... 41
A.Background on Credit Suisse
............................................ 42(1)Credit Suisse Private Banking........................................ 45(2)Clariden Leu...................................................... 46(3)Credit Suisse’s U.S. Cross Border Business.............................. 47 (4)Credit Suisse Internal Investigation.................................... 49
B.U.S.-Linked Accounts in Switzerland
..................................... 52(1)Over 1,800 Swiss Bankers Serviced Accounts for U.S. Clients............... 54(a)Swiss Bank Secrecy............................................ 55(b)Credit Suisse Organizational Barriers.............................. 56(c)U.S.-Linked Swiss Accounts Outside of SALN...................... 58(2)Most U.S. Account Assets Were Undisclosed............................ 61
C.Credit Suisse Banking Practices that Facilitated U.S. Tax Evasion
............. 65(1)Legal and Policy Restrictions on U.S. Activities.......................... 66i
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