The Justice Department is being urged by a Senate committee to take tougher actions against offshore tax evaders to recoup an estimated $150 billion a year.
A Senate Permanent Subcommittee on Investigations report issued Tuesday called upon the department to take legal action to recover the money and to enforce subpoenas in U.S. courts to to obtain the names of U.S. taxpayers with undeclared accounts at tax haven banks.
The Senate investigators are also want the department to hold tax haven banks accountable for aiding and abetting the fraud.
The report provided a broad look at offshore tax havens and identified Credit Suisse as among the foreign banks that have helped U.S. taxpayers hide billions of dollars.
To increase recovery of the lost taxes, the subcommittee, led by Michigan Democrat Carl Levin, said Facta loopholes should be closed, including escape hatches allowing financial institutions to ignore account information stored on paper and permitting foreign financial institutions to treat offshore shell entities as non-U.S. entities even when they are owned and controlled by U.S. persons.
Investigators faulted the Justice Department for failing to use all the tools it has aggressively, noting that for years it has not enforced grand jury subpoenas directed at UBS, Credit Suisse and a dozen other banks.
“DOJ has limited its efforts to making information requests under a time-consuming and restrictive treaty process that has produced relatively little useful information. DOJ’s reliance on the treaty process has also given Swiss regulators and Swiss courts control over the amount, nature and timing of the information supplied by Swiss banks,” the report said.
The gaps in law enforcement attacks on offshore tax evasion include failing to prosecute more than a dozen Swiss banks that facilitated the hiding of assets; the refusal to to take legal action against thousands of U.S. persons whose names and hidden Swiss accounts were disclosed by UBS, and the failure to use its authority to obtain the names of tens of thousands of additional U.S. persons whose identities are still being concealed by the Swiss, according to the report.
