The U.S. Department of Justice Tax Division and the Internal Revenue Service have been ramping up an intense crackdown on offshore tax evasion, and the IRS’s reduced resources due to new budget cuts is having no effect on IRS enforcement initiatives in this area.
The government’s reach has extended far beyond Switzerland, where it is pursuing criminal investigations of a dozen Swiss banks, and another 100 banks are seeking to avoid criminal investigations and prosecutions. The crackdown has reached jurisdictions including India, Liechtenstein, Luxembourg, Barbados, Hong Kong, Singapore and Israel. (Bank Leumi recently entered into a deferred prosecution agreement with the DOJ, paid a penalty of $270 million, and agreed to identify numerous additional Bank Leumi account holders in the U.S. to the IRS.) Numerous investigations are being pursued in other areas as well, which have not been made public.
