Offshore Tax Haven, Tax Evasion | featured news

Luxembourg says it will exchange information with the rest of Europe to help fight tax evasion. The initiative, which is to start in 2015, follows international pressure on Luxembourg to end its policy of banking secrecy that critics say has helped people hide money from tax authorities. Luxembourg, a tiny country of half a million people, boasts a huge financial industry with more than 3 trillion euros ($4 trillion) in assets.

Last year, about $450 million belonging to top executives at billionaire hedge fund manager John Paulson’s New York firm took a quick round trip to Bermuda. In April, the executives sent the money to a reinsurance company that they’d set up on the island 650 miles off the North Carolina coast. By June, the Bermuda company, which has no employees and sells far less reinsurance than the industry norm, had sent all the cash back to New York, to be invested in Paulson & Co. funds.

For decades, Switzerland was the place where money went to hide. Cash sent to its mountain aeries was protected by some of the strictest secrecy laws in the world.

Technology giants Microsoft Corp and Hewlett-Packard Co used offshore units to shield billions of dollars from U.S. taxes by taking advantage of loopholes and stretching the limits of the tax code, a U.S. Senate panel said on Thursday.

Wealthy tax evaders with assets stashed offshore can come clean with U.S. authorities under a new amnesty program letting them pay taxes with reduced penalties, the government said on Tuesday.

The Internal Revenue Service on Tuesday disclosed the criteria being used by the Swiss banking giant UBS to select names of American clients that will be turned over to the agency as part of a settlement of a tax evasion case.

Swiss bank UBS AG warned U.S. customers by registered mail their account details may be given to U.S. tax authorities, a method that could itself breach secrecy laws, a Swiss paper said on Sunday.

Faced with a Thursday midnight deadline to avoid possible prosecution, more than 7,500 Americans have come clean about secret foreign bank accounts, a senior IRS official said in an interview for broadcast tonight on "ABC World News with Charles Gibson."

Under an amnesty program, the IRS is allowing taxpayers to avoid prosecution for failing to report those accounts. Tax attorneys have been besieged by wealthy clients who are lining up to apply.

Wealthy U.S.

OECD confirms the country will go off their grey list following the signing of a 12th agreement on Thursday.