Government Growth: IRS Hires Hundreds To Chase Wealthy

The only sector during the recession that is growing is the public sector.  How many caught this story yesterday in USA Today?

Average pay $30,000 over private sector

By Dennis Cauchon

USA TODAY

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months — and that’s before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

Well it isn’t going to stop anytime soon, and now the IRS is getting into the groove since TurboTax Timmie, Barney and Company have made a priority of chasing down tax evaders who use offshore accounts.  The insanity of giving the IRS $387 million to chase down $13 Trillion in hidden offshore accounts instead of changing the tax code so that the wealthy would actually invest it in our economy is dazzling.  Add to that the brazen audacity of a tax cheat implementing this plan, and one has a recipe for expatriation.

IRS Hires Hundreds For New Wealth Unit

WASHINGTON (Reuters) – A new Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth in complex business entities is rapidly taking shape with the hiring of hundreds of employees.

The IRS high wealth unit, part of a broader effort to combat international tax evasion, is focusing on “the entire web of business entities controlled by a high wealth individual,” IRS Commissioner Doug Shulman told a tax conference this week.

Another IRS official told Reuters “hundreds” of people have already been hired to staff the new unit, including some from within the agency.

“We have drawn top talent within the IRS that have expertise involving wealthy individuals as well as examination of their related entities,” said Mae Lew, an IRS special counsel.

The high-wealth unit is focusing on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals.

While use of sophisticated legal structures can be legal, in other instances they “mask aggressive tax strategies,” Shulman said.

Tax authorities in Japan, Germany and the UK have also created similar units.

The U.S. House of Representatives on Thursday approved a $387 million boost for the IRS for the fiscal year that started October 1, in part to fund the high-wealth unit. The Senate is expected to vote on the measure on Sunday. (emphasis mine)

I think I may have mentioned the fact that these Sunday votes were going to become regular occurrences since the Democrats have to push through as much legislation as possible before we start firing them in 2010.

NEW GLOBAL FOCUS, JOINT CORPORATE AUDITS

The IRS is also opening new criminal offices in Beijing, Panama City and Sydney to focus on funds flowing out of Europe and into Asia, in part because of a heightened focus on international enforcement in Europe.

The goal is to get those up and running during this fiscal year, which ends September 30, according to Barry Shott, IRS deputy commissioner for international issues for large and midsized business.

At the center of the agency’s offshore effort is its legal cases against Swiss banking giant UBS AG. UBS agreed to turn over nearly 5,000 names of individual American clients and paid $780 million to settle a criminal case for aiding tax evasion.

Swiss Bank Closing Offshore American Accounts

According to Reuters, (and this post is being updated), UBS, a Swiss wealth manager, is closing U.S. clients’ offshore accounts because of pressure from the United States Government, and the IRS is benefiting.  Read the article and open your minds.

UPDATE 1-UBS closing U.S. clients’ offshore accounts

ZURICH, Jan 9 (Reuters) – Swiss wealth manager UBS AG (UBSN.VX: Quote, Profile, Research) (UBS.N: Quote, Profile, Research) is closing all the offshore accounts of its U.S. clients, the bank said on Friday, as it comes under pressure from U.S. tax authorities.

The Swiss bank decided in July last year to stop offering offshore accounts to U.S. citizens after it was targeted by a U.S. tax investigation which challenges Switzerland’s famous banking secrecy laws.

U.S. prosecutors have alleged UBS helped clients hide $18 billion of untaxed American money in undeclared accounts. This amounts to around $300 million of annual unpaid taxes, the newspaper said.

UBS spokesman Serge Steiner said the decision to close offshore accounts for U.S. domiciled clients was taken in November 2007. The bank started last year to close cash accounts of U.S. clients holding less than 50,000 Swiss francs ($45,660), he added.

“This is an ongoing process. It started last year and accelerated since last summer,” Steiner said, confirming a New York Times report. As part of the investigation, U.S. authorities indicted UBS’s wealth management chief last year.

UBS, which U.S. authorities say helped wealthy Americans hide cash in offshore bank accounts, will shut about 19,000 offshore accounts, the paper said, quoting unnamed U.S. clients.

…snip

Clients will have the option of transferring their assets to one of three U.S.-regulated units — on-shore wealth management units in the U.S., Switzerland and Hong Kong — or other banks, Steiner said.

They may also choose to receive checks, creating paper trails for U.S. federal prosecutors who are checking whether UBS clients used such accounts to evade taxes.

“You can either transfer the money to new banks, or deposit somewhere and get busted,” a UBS client was quoted as saying in the newspaper report.

All banks in Switzerland are bound to strict bank secrecy laws but a Swiss banking source said local private banks would be reluctant to take on any of UBS’ American offshore clients.

The transfer of more than $10,000 to a new bank is something that clients are expected to report to the Treasury Department, the paper said.

In a separate article, the Wall Street Journal said on Friday many U.S. clients of UBS had started to voluntarily turn themselves in to the U.S. Internal Revenue Service. The clients have so far avoided serious punishment, the paper said.

The gist of this is that after all these years, a Swiss banking giant is rolling over for the US Government and the IRS.  Does that sound a bit outlandish to you?   Have the Swiss ever asked for anybody’s “by your leave” when it comes to banking and money, and now all of a sudden they are letting the Bush Administration tell them what to do?  Does the last line about the IRS make any sense to you?  “The clients have so far avoided serious punishment…”  We are talking about $300 Million in unpaid taxes ANNUALLY.  Is this the same IRS we used to know?

Not likely….

What is much more likely is what I have been hearing lately about China losing interest in buying our new debt, and how our dollar is going to be devalued to the point where our money is not worth the paper that it is printed on.  Do you think the Swiss are going to have all that worthless paper sitting in their banks?  Has anybody been listening to Jim Rogers and Peter Schiff?

November 25th, 2008
Jim Rogers (Part 1 of 5, view the rest at the link)

You may be a bit skeptical about what Jim Rogers has to say about our economy and the money flowing to the east so I thought I would share a little story with you about a real everyday person. Today I went to see my eye doctor who I have known for years. We were chatting about the economy and he stated to me the exact same issues that Jim Rogers covered in the video, and added that he is currently learning Chinese.

Have you ever heard the saying “if you want to succeed at something, follow the footsteps of someone that has”?

Rosetta Stone and Chinese will be coming to my house soon, and/or, we kick every single one of our elected officials that are going along with this travesty to the curb.  What say you?  Is anybody ready to take our country back?

Follow the money….

(Author’s Update:  UBS is listed as a corporate member of the Council On Foreign Relations.  Thought you might find that interesting.)

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