IRS Blues


1 Jun 12    The Mortgage Fraud Fraud, NYT, JOE NOCERA
26 May 12    With Personal Data in Hand, Thieves File Early and Often, NYT, LIZETTE ALVAREZ
10.Mai 12    Food for thought for an American journey, Anton Keller (deutsch)
14.Apr 12   Notiz zur Parlamentarierreise nach Washington (6.Mai), Anton Keller (English)
2 Jan 12    Swiss Lawmaker Query to IRS Commissioner Douglas H. Shulman
29 Dec 11    Suppose: I'm a kingpin with $100mio to wash: Philippika against QI/FATCA/OECD Aberrations, Iconoclast
22 Oct 09    A Call to Stop the QI Wildcat Train in its Tracks, ASDI/SIPA




ASDI/SIPA    October 22, 2009 (last update: 25.1.10)
 
 IRS Blues: Call to Stop the QI Wildcat Train in its Tracks
 
Dear comrade-in-arms,
The Swiss/US emergency Agreement of August 19, 2009 (www.solami.com/CH-US.pdf), negociated under duress, is seen to constitute an alarming, for potentially hugely damaging diktat by an out-of-control, globally marauding Internal Revenue Service IRS.Backed by an over-exposed and disoriented US administration struggling to recognise its own limits, this looks like the IRS version of the blindly and arrogantly revenge-seeking and fateful Versaille Treaty. In as much as it was intended to defuse the dangerously veering IRS/UBS outgrowth of their illegal qualified intermediary conspiracy (.../QI.htm ¦ .../USvsUBS.htm), it calls - on both sides - for sober and well-moored reflections, sine ira et studio, and in the interest of the traditionally amicable bilaterral relations and the economy of both the US and Switzerland and far beyond.

Maybe the original idea of channelling the annually accruing trillions of "parallel economy" dollars back into "white economy".(IMF 1998 estimate: "2-5% of world GDP") has still merit and a universally beneficial future - if developed and implemented with full respect to sovereignty, privacy and the rule of law. But the IRS' narrow-minded attempt to copy the "World's District Attorney" of New York (.../swissbanks.htm#studio), and become the world sheriff and money-laundering monopoly-holder could not but end in disaster sooner or later. Particularly as it was done behind the back of its own constitutional lawmakers, and regardless of the convenient cover of a gullible "serious" private player like UBS as reference partner par excellence. The IRS's related anti-business rip-off used to be called protection money. It now comes under a more sanitized term, i.e. its unfamously confiscatory 28% "backup withholding tax". My own uneducated estimate is that the IRS now collects annually some $500 bn through its clandestinely setup network of globally some 7000 QI banks (so far, the IRS and US Treasury repeatedly declined my invitations to either confirm, deny or correct this sum, or to state who, in the event, secures the public accounting of these slush funds).
UBS having served its initial QI co-organisational and figleaf purposes, appears now to have been seen by the IRS to have outlived its related usefulness and special status. UBS had gotten some compensation crumbs on the legal margins at best in the form of some limited and pretendedly QI-conform concessions like no IRS interest and control over the real economic beneficiery behind some IRS-agreed structures, and prior IRS consent to place the some thus "privileged" - and now betrayed - 20000 American UBS clients' some $20bn then invested in U.S. securities in "UBS investment funds and certain derivative products." (sic!; IRS Reeves Declaration to the US Court in Miami, his exhibit 8, doc, 2-2, p.17). As such, UBS was a sitting duck, and the current IRS leadership, not untypically, didn't particularly care for honoring or even remembering the IRS' past positions when that seemed no longer politically correct.

For the time being, and in the above sense, I am looking for immediately helpful, notably legal ideas and hooks to bring this cancerous IRS juggernaut to a halt to avoid further damage as quickly and as far as is feasible. I.e. before the unwittingly self-damaging message provoked by the IRS to pull out of the U.S. market catches on, as the CEO of Switzerland's oldest private bank Wegelin, Konrad Hummler, has resoundingly called for with his widely noted philippic "Farewell America" of August 24, 2009 (press release). And though his clarion call may not in and by itself unleash a dangerous stampede out of the U.S. market yet, it is seen to be a watershed event all the same, eventually affecting also monetary matters. For much of the investment community has been unmoored and driven onto untested terrain. In fact, ever since 1971 it has been left drifting and been characterized by an absence of principled leadership, with a growing presence of apprentice-sorcerers and marauding institutional bullies. Such volatility-feeding pepped up sentiments are seen to be shared growingly, particularly among equally concerned and visionary European and Mideastern banker colleagues and their clients (Mideast investment cuts hit private equity, FT, 19 Oct 09; Countdown to the next crisis is already under way, FT, 19 Oct 09; .../QI.htm#Steuerkonflikte ¦ .../QI.htm#Jerusalem).

The available Swiss legal defenses and traditional ways and means against transmission of any of the "agreed-to" some 4450 UBS account data cannot reliably be expected to provide effective protection for most if not all of the clients concerned, eventually untypically citizen-friendly rulings by the Swiss Federal Administratice Court notwithstanding. I am thus hoping for our American friends and other comrades-in-arms to come up with practical ideas, indications and suggestions for blocking, in the event, any and all Swiss bank data thus extracted as being tainted and not usable in U.S. courts. In the same vein - in the sense of an admittedly risky high-wire act - I could imagine one of you remembering, or being interested to conduct a corresponding pro bono research without delay on whether a U.S. Court, or perhaps a congressional authority, has ever stated something along the following lines which seems obvious but could now be decisively helpful if available in time and in writing for the Swiss courts concerned:
If there is no treaty obligation to extradite a tax cheat, no legal obligation can be construed either to exact his foreign bank data. Unless this was freely and explicitly agreed upon, such data transmission could be in violation not only of his constitutional rights against self-incrimination, but also of his privacy, equal treatment and other treaty rights.

So please tell me what's your take on this! Thank you for your prompt and benevolent consideration of the above. Salve!
<>Anton Keller, Secretary, Swiss Investors Protection Association
+4122-7400362    +4179-6047707    swissbit@solami.com
PS.  related e-books: "Sovereignty Principles & Extradition Aberrations", "Swissbanks", Banks as IRS agents.

Authorities eventually underpinning such a blocking statement are seen to be (emphasis added):

1.    US Constitution, 5th Amendment

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

2.    Swiss-US Friendship, Reciprocal Establishments, Commerce and Extradition Convention of Nov 25 1850
 (SR 0.142.113.361) http://www.admin.ch/ch/d/sr/c0_142_113_361.html

ARTICLE   I        The citizens of the United States of America and the citizens of Switzerland shall be admitted and treated upon a footing of reciprocal equality in the two countries, where such admission and treatment shall not conflict with the Constitutional or legal provisions as well Federal as State and Cantonal of the contracting parties. The citizens of the United States and the citizens of Switzerland, as well as the members of their families, subject to the Constitutional and legal provisions aforesaid, and yielding obedience to the laws, regulations and usages of the country wherein they reside, shall be at liberty to come, go, sojourn temporarily, domiciliate or establish themselves permanently, the former in the Cantons of the Swiss Confederation, the Swiss in the States of the American Union, to acquire, possess and alienate therein property (as is explained in Article V); to manage their affairs, to exercise their profession, their industry and their commerce, to have establishments, to possess warehouses, to consign their products and their merchandise, and to sell them by wholesale or retail, either by themselves, or by such brokers or other agents as they may think proper; they shall have free access to the Tribunals and shall be at liberty to prosecute and defend their rights before courts of Justice, in the same manner as native citizens, either by themselves, or by such advocates, attorneys or other agents as they may think proper to select. No pecuniary or other more burdensome condition shall be imposed upon their residence or establishment, or upon the enjoyment of the above-mentioned rights than shall be imposed upon citizens of the country where they reside, nor any condition whatever, to which the latter shall not be subject.

3.    Swiss/US Extradition Treaty of 14 November 1990
(SR 0.353.933.6) http://www.admin.ch/ch/d/sr/i3/0.353.933.6.de.pdf

Art.3
3. Der ersuchte Staat kann die Auslieferung ablehnen für Taten, die:
(a) Gesetzesbestimmungen verletzen, die sich ausschliesslich auf Währungs-, Handels- oder Wirtschaftspolitik beziehen;
(b) ausschliesslich dem Zwecke dienen, Steuern oder Abgaben zu vermindern;

3. L’Etat requis peut refuser l’extradition pour des actes
a) qui violent des dispositions légales régissant des questions d’ordre exclusivement
monétaire, commercial ou économique;
b) qui ont pour unique but de faire diminuer des impôts ou des taxes ou

(unofficial translation)
3. The requested State can refuse an extradition for offences which
(a) violate laws relating exclusively to monetary, commercial or economic policy,
(b) aim exclusively to reduce taxes or duties,

Art. 19     Herausgabe von Gegenständen
1. Der ersuchte Staat übergibt, wenn die Auslieferung bewilligt wird und soweit es seine Rechtsvorschriften zulassen und unter Vorbehalt der Rechte Dritter, dem ersuchenden Staat alle Gegenstände, die als Beweismittel dienen können oder die aus der strafbaren Handlung herrühren oder als Entgelt für solche Gegenstände erlangt wurden und die im Zeitpunkt der Festnahme im Besitz des Verfolgten gefunden worden sind oder später entdeckt wurden. Die Gegenstände werden wenn möglich gleichzeitig mit dem Verfolgten und auch ohne ausdrückliches Ersuchen übergeben. Die Gegenstände werden auch dann herausgegeben, wenn der Verfolgte, dessen Auslieferung bereits bewilligt worden ist, nicht übergeben werden kann.
[Umkehrschluss: Die Gegenstände, also z.B. Bankkundendaten, werden dann nicht herausgegeben, wenn die Auslieferung des Verfolgten nicht bewilligt worden ist, resp. deren allenfalls bereits erfolgte Herausgabe erfolgte ohne weiteres unter dem in Art.16 festgeschriebenen Spezialitäten-Prinzip und steht somit unter entsprechender Quarantäne, deren Handhabung dem Recht des ersuchten Staates untersteht.]
2. Der ersuchte Staat kann die Herausgabe der Gegenstände von der hinreichenden Zusicherung des ersuchenden Staates abhängig machen, dass die Gegenstände dem ersuchten Staat so bald als möglich zurückgegeben werden.

4.    US/Swiss Mutual Legal Assistance Treaty of May 25, 1973
(SR 0.351.933.6) http://www.admin.ch/ch/d/sr/i3/0.351.933.6.de.pdf

Article 3     Discretionary Assistance
1. Assistance may be refused to the extend that:
(a) the requested state considers that the execution of the request is likely to prejudice its sovereignty, security or similar essential interests;

Art. 3     Rechtshilfe nach Ermessen
1. Die Rechtshilfe kann verweigert werden, soweit:
a. der ersuchte Staat der Ansicht ist, dass die Erledigung des Ersuchens geeignet wäre, die Souveränität, Sicherheit oder ähnliche wesentliche Interessen seines Landes zu beeinträchtigen;

5.    EU/US Agreement on mutual legal assistance of June 25, 2003
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:22003A0719(02):EN:HTML

Article 13     Non-derogation
Subject to Article 4(5) and Article 9(2)(b), this Agreement is without prejudice to the invocation by the requested State of grounds for refusal of assistance available pursuant to a bilateral mutual legal assistance treaty, or, in the absence of a treaty, its applicable legal principles, including where execution of the request would prejudice its sovereignty, security, ordre public or other essential interests.

October 22, 2009 {url: www.solami.com/IRSblues.htm]



January 2, 2012
automatische Übersetzung
traduction automatique


Swiss Lawmaker Query
to Internal Revenue Service Commissioner Douglas H. Shulman, Washington

Dear Sir,

This is to present my compliments at the beginning of a new year and - I trust - a renewal of friendly and mutually respectful and helpful relations between the American and the Swiss people, as reflected notably in the Swiss/American Friendship, Reciprocal Establishments, Commerce, and Extradition Treaty of November 25, 1850 (SR 0.142.113.361) and, more recently, in the Joint Declaration of the US Congress of October 30, 1985.

I've been a long-term observer of relations between our two countries and, in my capacity as adviser of past and current members of the Swiss Parliament, on different occasions, I've been called upon in delicate parallel diplomacy missions involving the United States and third countries, including Iran and the Soviet Union. The topic of this information request concerns a complicated subject where the US Internal Revenue Service is understood to have a perfect deep-draught up-to-date knowledge, i.e. the Qualified Intermediary (QI) system and its application on the background of the US/Swiss double-taxation treaty of 1996 (96 Treaty: SR 0.672.933.61).

The Swiss Parliament is currently in the process of considering both various aspects of the QI system, and an amendment to a previously, in 2010 passed revision ("revision", dated September 23, 2009) of the 96 Treaty. In order to help clarify some related points, I have the honor, on behalf of several Swiss lawmakers, to submit the following questions to your benevolent attention for reply (the responsible commissions are scheduled to meet on January 9, 10 and 31, and in order for your answers, in the event, to be considered in these proceedings, I expect them as soon as possible):

1.    a)  How is the IRS justifying its campaign to hunt down - at disproportionate political, financial and goodwill costs world-wide - suspected treaty shoppers and tax dodgers with an alleged annual loss to the US Treasury in the range of some hundred million dollars, when in fact its QI system's obscured yet real backup withholding part is designed and capable to syphon off revenue streams grosso modo one thousand times larger from the global parallel economy, as revealed and repeatedly discussed at recent sessions of the Cambridge International Symposium on Economic Crime?  Which also begs the supplementary question: If indeed, in the event, the IRS hasn't seen fit to use this system in order to rake in all those hundreds of billion dollars from undelicate and indeed very willing US and non-US persons - and below the radar of all democratic controls at that -, what has kept it from helping to defuse the US debt crisis and to relieve the US economy with those means?
    b)  How much total revenues did the IRS receive from Swiss QIs (notably banks) in each year since 2001 when the QI system became operational,
    -  under the applicable 15% or 30% tax rate for interest, dividends, etc., and
    -  under the applicable 28% or 31% backup withholding rate for securities sales (US and others, "deemed" or otherwise)?

2.    a)  When did the US Congress examine and approve, when did the US President sign and put into effect, the IRS' "Rev. Proc 2000-12" (model QI Agreement) or any of its amendments?
    b)  Why, in the event, was neither necessary, even though the backup withholding on securities sales (US and others, "deemed" or otherwise, initially 31% and later 28%) - whether it is called a tax or not - falls into the exclusive purview and competence of the US Congress (Section 8 US Constitution), and the conditions of the mandatory Administrative Procedure Act (APA, 5 U.S.C. § 702ss) were met?

3.    Where - in the 96 Treaty, in the pending revision of same, in any other related congressional material, and in the Treasury's "Technical Explanation" of the 96 Treaty - is authority granted:
    a)  for requests involving anything but individually and properly identified taxpayers?
    b)  for requests involving anything but administrative procedures available in both countries?
    c)  for requests intended and serving any other purpose than the proper administration of the treaty itself and the "prevention" of - i.e. exclusively in the field preceding, much less enforcing penal norms regarding - "fraud and the like"?
    d)  for nameless group requests for pseudo-administrative but in fact - due to the Swiss/US legal assistance treaty of 1973 (SR 0.351.933.6) - essentially excluded legal assistance in fiscal matters?
    e)  for Swiss nameless group requests for checking, at American banks in the US, whether, e.g., the spirit and the letter of the 96 Treaty is fully upheld, thus honoring the fundamental and time-tested principle of reciprocity?

4.    On what authority and grounds, in the event,
    a)  can a US Senate-approved treaty, like the 96 Treaty, be transgressed by any US entity?
    b)  could the QI Agreement between the IRS and UBS and Credit Suisse, respectively be negociated and placed into which legal status outside the framework of existing US/Swiss treaties?
    c)  could the Swiss/US memorandum of understanding of August 19, 2009 (SR 0.672.933.612) be negociated and signed by IRS Deputy Commissioner Barry B. Shott outside the framework of existing Swiss/US treaties (according to the applicable laws of both the United States and Switzerland, this memorandum - like any other administrative agreement - is understood to be legally binding only within the limits defined in the 96 Treaty; the Swiss Administrative Federal Court, in its landmark decision A 7789/2009 of Januar 21, 2010 thus ruled against delivery of any banking data on the sole basis of said memorandum, declaring this memorandum to be essentially outside the confines of the 96 Treaty)?
d)  could the US/Swiss memorandum of understanding of March 31, 2010 be negociated and signed by Treasury Director Douglas W. O’Donnell outside the framework of existing US/Swiss treaties (the Swiss constitutional lawmakers felt obliged to raise that revised memorandum to the level of a treaty; the US constitutional lawmaker, however, is understood to have never been even invited to consider same, and the US President is not known either for ever having put his signature on this document, for which reason it has not even been raised to the level of an executive agreement and has thus, according to US law, too, remained a purely administrative ukase with no legally binding effect - neither for the Swiss authorities, which thus acted outside the frame of both the 96 Treaty and other applicable laws, nor for US authorities and any affected US person whose privacy rights were thus violated, and who may thus yet benefit from the fundamental rights to which they are entitled)?
    e)  could and should the IRS have sought enforcement of a memorandum of understanding negociated and signed outside the framework of existing Swiss/US treaties,outside of applicable US administrative procedures (e.g. 11 FAM 700, 11 FAM 720, 11 FAM 721.2, notably Department of Justice Memorandum of 25.November 1996 "Validity of Congressional-Executive Agreements that substantially modify the United States' obligations under an existing treaty" by Christopher Schroeder, Acting Assistant Attorney General, addressed to Alan J. Kreczko, Special Assistant to the President and Legal Adviser to the National Security Council), and for which it obtained neither congressional approval nor the Presidential Seal, and which, moreover, in light of applicable conventions, has been invalid ex tunc?

5.    a)  Why should it be in the United States' overall interest to have, in law and in practice, Swiss authorities not to strictly, reliably and with utmost determination respect its own and others' treaty rights, obligations and limits, as it did when other US office holders saw fit to seek to kidnap Marc Rich on Swiss territory, to try to nail the scalp of Swiss banking secrecy to the wall, or to pressure Swiss authorities into extraditing Roman Polanski?
    b)  Why should Swiss authorities accept - be it under genuine or false flags, whether because of real or made-believe hypocritical concerns - to be steamrolled into assisting any US authority in the pursuit of the latter's interests under any circumstance, particularly as long as Switzerland has not on its own, sovereignly and freely decided such a course of action to be in its interests, to be fully in line with its public ordre and to favor its internationally recognised permanent armed neutrality not excluding its traditional courant normal?
    c)  Why, in the event, should Switzerland not recognise and treat its QI bankers and their clients as victims of a bureaucratic conspiracy - and annul forthwith the penal code exemption (art.271) which, since 2001, has allowed its bankers to support, even privilege the US economy through the disproportionally costly QI system, a conspiracy, incidently, which by now involves some 7000 foreigns banks world-wide and which - with its obfuscated, legally questionable and apparently uncontrolled confiscatory backup withholding tax - may be useful to bring a big chunk of the world's annual trillion dollar underground pot back into the "white economy"? Why, in the event, should Switzerland - with a view to help to globally re-stabilise financial markets - not lend a hand to those willing to achieve this very objective of rechannelling marauding underground funds with more mutually beneficial and democratically better controlled ways and means? And why, in the event, should Switzerland not expect the US authorities' full cooperation - i.e. without need to take recourse to corrective and compensatory political and legal actions in the United States and elsewhere - to withdraw forthwith all related administrative assistance requests, to reconsider its FATCA and similar anti-freedom, anti-sovereignty and anti-market plans, and to stop all proceedings against what are seen to be hood-winked and essentially falsely accused Swiss banks and their thus improperly persecuted clients?

Thanking you for your attention, I take this opportunity for extending to you my best regards and New Year wishes.

Anton Keller
Geneva Switzerland
+4122-7400362    swissbit@solami.com

cc: selected members of US Congress



12.3255 – Motion
Keine Fiskalexperimente ohne Reziprozität
Eingereicht von    Freysinger Oskar
Einreichungsdatum    15.03.2012
Eingereicht im    Nationalrat
Stand der Beratung    Im Plenum noch nicht behandelt

Eingereichter Text
    Der Bundesrat wird beauftragt,
    1. auch formell und für Gruppenanfragen gültig, sicherzustellen
    a) was die Bundespräsidentin am 5.3.12 im NR kundtat, nämlich im DBA 96 sei „die Reziprozität materiell gegeben. Wir versuchen auf der formellen Seite das nachzuholen.“ (www.solami.com/iconoc.htm#record), und
    b) dass diese einseitige Weltneuheit gegenüber allen Vertragspartnern nur bei voller formaler Reziprozität erfüllt wird, und zwar als Ausfluss der völkerrechtlich gleichwertigen Souveränität;
    2.  bei den Schweizer Banken, welche mit der US-Steuerbehörde IRS ein Qualified Intermediary Agreement (QIA) abgeschlossen haben, und bei der IRS in Erfahrung zu bringen, mit welchem Aufwand zulasten der Banken, resp. der IRS, wie viele QI-Steuerrückbehalte der IRS seit 2001 zugeflossen sind
    a) für Zinserträge und Dividenden (15%, resp. 30%), und
    b) für Kapitalschnitte (vom US-Kongress nie bewilligte „backup withholding tax“, früher Schutzgeld für Anonymität genannt, 31%, resp. 28% des Kapitals: …/kingpin.htm#SS);
    3. die sofortige oder graduelle Aufhebung der EFD-Ausnahmebewilligigung zu Art.271 StGB vom 7.11.00 zu prüfen und damit die abartige Vollzugsfunktion der Schweizer Banken am fremdbestimmten QI- und an ähnlich souveränitäts-, ordre public- und interessen-widrigen Fiskalsystemen eigenständig die Rechtsbasis zu entziehen;
    4. die Kündigung des DBA 96 auf den nächsten Termin zu prüfen und allenfalls vorzunehmen, und da die Verständigungs-Vereinbarung von 2009 (UBS-Vertrag) US-seitig nie über den DBA-Rahmen hinaus Rechtskraft erlangte, sind sämtliche ausstehenden Datenlieferungen unter Androhung von Art.267 StGB zurückzuhalten, und die bereits ausgehändigten sind offiziell als unrechtmässig erfolgt zu erklären; und
    5. dem US-Staatsdepartement die Ideen, Hinweise und Fragen vorzulegen, welche zur baldigen Herbeiführung einer nachhaltigen Globallösung der eingetretenen Unstimmigkeiten im Finanzsektor auf der Grundlage des Geistes und der Texte der bilateralen Verträge beitragen mögen (insbesondere die im Namen von Eidg. Parlamentariern dem IRS-Kommissar am 2.1.12 vorgelegten fünf Fragen: …/irsquery.htm). Dahingehend ist auch an ein entsprechendes Schiedsverfahren zu denken. Und es ist an die traditionell freundschaftlichen Banden und beidseitigen Interessen der „Schwester-Republiken“ zu erinnern (…/iconoc.htm#Kopp).

Stellungnahme des Bundesrates vom 16.05.2012
Ad 1.:    Die Bestimmungen des DBA-USA von 1996 sowie der anderen DBA zum Informationsaustausch gelten für beide Vertragspartner gleichermassen. Die Schweiz kann somit Gegenrecht beanspruchen. Für das DBA-USA gilt dies auch in Bezug auf Gruppenanfragen, da es diese, anders als die anderen DBA, bereits jetzt zulässt.
    Gegenwärtig wird der Kommentar zu Art. 26 des OECD-Musterabkommens revidiert; die Neukommentierung wird auch Gruppenanfragen vorsehen. Ab dem Zeitpunkt, wo die Schweiz anderen DBA-Vertragsstaaten gegenüber Gruppenanfragen zulässt, kann sie solche auch an die Vertragsstaaten richten.
    In einem Punkt verzichtet die Schweiz auf Reziprozität: Schweizerische Amtshilfeersuchen - seien es Gruppenanfragen oder Ersuchen im Einzelfall - zu Bankinformationen dürfen nach geltendem schweizerischem Recht nur gestellt werden, soweit diese Informationen auch nach schweizerischem Recht beschafft werden könnten (Art. 16 Abs. 5 der Verordnung über die Amtshilfe nach Doppelbesteuerungsabkommen [SR 672.204]). Dies ist bei Betrugstatbeständen und schwerer Steuerhinterziehung, nicht aber bei einfacher Steuerhinterziehung oder beim Austausch von Informationen bloss zu Veranlagungszwecken der Fall.

Ad 2. und 3.:    Die GPK NR und SR haben in ihrem Bericht vom 30. Mai 2010 "Die Behörden unter dem Druck der Finanzkrise und der Herausgabe von UBS-Kundendaten an die USA" u. a. Fragen zur Auslegung und Anwendung von Art. 271 StGB und zum Qualified Intermediary Agreement (QIA) untersucht. Mit Postulat 10.3390 GPK NR/10.3629 GPK SR haben sie den Bundesrat beauftragt, zu ihren Fragen einen Bericht vorzulegen. Der von den GKP angeforderte Bericht des Bundesrates wird demnächst publiziert. Der Bericht wird die heutige Rechtslage und die Praxis in Bezug auf die Erteilung von Bewilligungen nach Art. 271 Ziff. 1 StGB erläutern. Er zeigt, dass die Bewilligungserteilung restriktiver geworden ist. Weiter enthält der Bericht Empfehlungen an die mit der Bewilligungserteilung befassten Departemente.
    Wir sehen keinen Anlass für eine Untersuchung über die QI-Steuerrückbehalte, wie sie vom Motionär skizziert wird.

Ad 4.:    Für die Prüfung einer Kündigung des DBA-USA besteht kein Anlass.

Ad 5.:    Mit der Verhandlungsführung gegenüber den USA ist das EFD betraut. Die Verhandlungen sind noch im Gang.

Antrag des Bundesrates vom 16.05.2012
Der Bundesrat beantragt die Ablehnung der Motion.

Mitunterzeichner (17)
Aebi Andreas, Amaudruz Céline, Büchel Roland Rino, Bugnon André, de Courten Thomas, Estermann Yvette, Fehr Hans, Flückiger-Bäni Sylvia, Grin Jean-Pierre, Joder Rudolf, Parmelin Guy, Perrin Yvan, Reimann Maximilian, Rusconi Pierre, Schwander Pirmin, von Siebenthal Erich, Wobmann Walter

Originalversion
12.3255 – Motion
No fiscal experiments without reciprocity
Submitteded by    Freysinger Oskar
Date of submission    15.03.2012
Submitted in    National Council
Current status    Not yet debated in the plenary

The Federal Council is requested
   1.  to secure, formally and in ways which will make it valid also for nameless group requests,
a) that which the Federal President explained to the National Council on March 5, 1912, i.e. the double-taxation agreement between the United States and Switzerland of 1996 (96 Treaty) already "provides in effect reciprocity. We are trying to close the formal gap." (www.solami.com/iconoc.htm#record), and
b) that this unilateral commitment - a world's first at that - will be fulfilled in relation with all treaty partners only under conditions of full formal reciprocity, in line with the international public law principle of equal sovereignty;
   2.  to obtain the information, from those Swiss banks who have concluded a Qualified Intermediary Agreement (QIA) with the US fiscal authority IRS, and from the IRS, regarding taxes collected on behalf of and transferred to the IRS, at what costs to themselves and to the IRS,
a) for interest and dividend payments (15%, respectively 30%), and
b) for capital cuts ("backup withholding tax", also known as anonymity protection fee, of 31% or 28% of capital which tax, however, has never been authorised by the US Congress: …/kingpin.htm#SS);
   3.   to examine the immediate or gradual withdrawal of the special authorisation under penal code article 271 granted by the Federal Finance Ministry on November 7, 2000, thus unilaterally withdrawing the legal basis for Swiss banks to divert from their key function of serving and protecting their clients under Swiss law, to favoring and protecting, under foreign law, the interests of foreign tax authorities on the back of their own clients, as has been the case with the IRS' global QI system, and as is planned in other foreign tax systems undermining time-tested sovereignty rules, public order and national interests;
    4.   to examine and, in the event, to abrogate at the earliest possible date the 96 Treaty, and to withhold all remaining data transfers under threat of penal code article 267 persecutions (diplomatic treason) and to officially declare all previously executed data transfers to be illegal and void in as much as their legal basis, i.e. the Mutual Agreement of August 19, 2009 (UBS treaty, as amended March 31, 2010), has never been put into force on the US side and thus could not deploy any legal effect beyond the strict limits of the 96 Treaty; and
    5.   to submit to the US State Department ideas, indications and questions which may contribute to a genuinely negociated, early and lasting resolution of the outstanding finance sector issues on the basis of the spirit and texts of the bilateral treaties (notably regarding the five questions which were addressed to the IRS Commissioner on January 2, 2012, in the name of some Swiss lawmakers: …/irsquery.htm). Consideration may also be given to a corresponding arbitration. All of which should take account and remain in line with the traditionally friendly and mutually beneficial relations between our "Sister Republics" (…/iconoc.htm#Kopp).

Stellungnahme des Bundesrates vom 16.05.2012
Ad 1.:    Die Bestimmungen des DBA-USA von 1996 sowie der anderen DBA zum Informationsaustausch gelten für beide Vertragspartner gleichermassen. Die Schweiz kann somit Gegenrecht beanspruchen. Für das DBA-USA gilt dies auch in Bezug auf Gruppenanfragen, da es diese, anders als die anderen DBA, bereits jetzt zulässt.
    Gegenwärtig wird der Kommentar zu Art. 26 des OECD-Musterabkommens revidiert; die Neukommentierung wird auch Gruppenanfragen vorsehen. Ab dem Zeitpunkt, wo die Schweiz anderen DBA-Vertragsstaaten gegenüber Gruppenanfragen zulässt, kann sie solche auch an die Vertragsstaaten richten.
    In einem Punkt verzichtet die Schweiz auf Reziprozität: Schweizerische Amtshilfeersuchen - seien es Gruppenanfragen oder Ersuchen im Einzelfall - zu Bankinformationen dürfen nach geltendem schweizerischem Recht nur gestellt werden, soweit diese Informationen auch nach schweizerischem Recht beschafft werden könnten (Art. 16 Abs. 5 der Verordnung über die Amtshilfe nach Doppelbesteuerungsabkommen [SR 672.204]). Dies ist bei Betrugstatbeständen und schwerer Steuerhinterziehung, nicht aber bei einfacher Steuerhinterziehung oder beim Austausch von Informationen bloss zu Veranlagungszwecken der Fall.

Ad 2. und 3.:    Die GPK NR und SR haben in ihrem Bericht vom 30. Mai 2010 "Die Behörden unter dem Druck der Finanzkrise und der Herausgabe von UBS-Kundendaten an die USA" u. a. Fragen zur Auslegung und Anwendung von Art. 271 StGB und zum Qualified Intermediary Agreement (QIA) untersucht. Mit Postulat 10.3390 GPK NR/10.3629 GPK SR haben sie den Bundesrat beauftragt, zu ihren Fragen einen Bericht vorzulegen. Der von den GKP angeforderte Bericht des Bundesrates wird demnächst publiziert. Der Bericht wird die heutige Rechtslage und die Praxis in Bezug auf die Erteilung von Bewilligungen nach Art. 271 Ziff. 1 StGB erläutern. Er zeigt, dass die Bewilligungserteilung restriktiver geworden ist. Weiter enthält der Bericht Empfehlungen an die mit der Bewilligungserteilung befassten Departemente.
    Wir sehen keinen Anlass für eine Untersuchung über die QI-Steuerrückbehalte, wie sie vom Motionär skizziert wird.

Ad 4.:    Für die Prüfung einer Kündigung des DBA-USA besteht kein Anlass.

Ad 5.:    Mit der Verhandlungsführung gegenüber den USA ist das EFD betraut. Die Verhandlungen sind noch im Gang.

Antrag des Bundesrates vom 16.05.2012
Der Bundesrat beantragt die Ablehnung der Motion.

Cosignatories (17)
Aebi Andreas, Amaudruz Céline, Büchel Roland Rino, Bugnon André, de Courten Thomas, Estermann Yvette, Fehr Hans, Flückiger-Bäni Sylvia, Grin Jean-Pierre, Joder Rudolf, Parmelin Guy, Perrin Yvan, Reimann Maximilian, Rusconi Pierre, Schwander Pirmin, von Siebenthal Erich, Wobmann Walter





May 26, 2012

With Personal Data in Hand, Thieves File Early and Often
By LIZETTE ALVAREZ

MIAMI — Besieged by identity theft, Florida now faces a fast-spreading form of fraud so simple and lucrative that some violent criminals have traded their guns for laptops. And the target is the United States Treasury.

When Flora Goldberg tried to file her tax return last year, she learned that someone had beaten her to it. Barbara P. Fernandez for The New York Times

With nothing more than ledgers of stolen identity information — Social Security numbers and their corresponding names and birth dates — criminals have electronically filed thousands of false tax returns with made-up incomes and withholding information and have received hundreds of millions of dollars in wrongful refunds, law enforcement officials say.

The criminals, some of them former drug dealers, outwit the Internal Revenue Service by filing a return before the legitimate taxpayer files. Then the criminals receive the refund, sometimes by check but more often though a convenient but hard-to-trace prepaid debit card.

The government-approved cards, intended to help people who have no bank accounts, are widely available in many places, including tax preparation companies. Some of them are mailed, and the swindlers often provide addresses for vacant houses, even buying mailboxes for them, and then collect the refunds there.

Postal workers have been harassed, robbed and, in one case, murdered as they have made their rounds with mail trucks full of debit cards and master keys to mailboxes.

The fraud, which has spread around the country, is costing taxpayers hundreds of millions of dollars annually, federal and state officials say. The I.R.S. sometimes, in effect, pays two refunds instead of one: first to the criminal who gets a claim approved, and then a second to the legitimate taxpayer, who might have to wait as long as a year while the agency verifies the second claim.

J. Russell George, the Treasury inspector general for tax administration, testified before Congress this month that the I.R.S. detected 940,000 fake returns for 2010 in which identity thieves would have received $6.5 billion in refunds. But Mr. George said the agency missed an additional 1.5 million returns with possibly fraudulent refunds worth more than $5.2 billion.

Florida, with its large population of elderly residents and health care facilities, provides a wealth of opportunities for swindlers. South Florida, which had the highest rate of identity theft in the nation, and Tampa have been hit hardest.

The United States attorney for the Southern District of Florida, Wifredo A. Ferrer, called identity-theft tax fraud an “epidemic.” He formed a task force of 18 federal and state agencies, including the I.R.S., to combat the problem. Despite those efforts, it is worsening, Mr. Ferrer said.

“The I.R.S. is doing what they can to prevent this, but this is like a tsunami of fraud,” Mr. Ferrer said. “Everywhere I go, every dinner, every function I attend, someone will come up to me and tell me they are a victim — people in this office, police officers, firefighters.”

In the past two years, the I.R.S. has recognized the severity and rise of this type of fraud, and its vulnerability to it. The ease of electronic filing and the boom in identity theft have outpaced the agency’s technological ability to detect this sort of fraudulent claim, senior agency officials say. The I.R.S. receives 100 million tax returns a year, most filed within a short period of time and a vast majority legitimate.

From 2008 to 2011, the number of returns filed by identity thieves and stopped by the I.R.S. increased significantly, officials said. Last year, it was at least 1.3 million, said Steven T. Miller, deputy commissioner for services and enforcement at the agency.

This year, with only 30 percent of the filings reviewed so far, the number is already at 2.6 million. The bulk are related to identity theft, Mr. Miller said.

The agency, prodded by lawmakers and the public, is moving more aggressively to stop the avalanche. It has increased the number of investigators, put in place better technology that flags more returns, distributed personal identification numbers to victims for the next filing season and hired more workers to help taxpayers get their refunds. The agency, which had $300 million cut from its budget this year, has invested the same amount in combating the problem.

The agency is also working with local law enforcement officials in Florida, allowing them to obtain information on tax returns with the permission of the rightful taxpayer, an important tool for investigators.

“We have gotten much better at it,” Mr. Miller said, “and still have a ways to go.”

At the same time, members of Florida’s Congressional delegation have introduced legislation to increase penalties on tax-fraud identity theft. A wide-reaching bill sponsored by Senator Bill Nelson, a Democrat, would also bolster protections for victims, help secure some Social Security numbers and make it easier for law enforcement agencies to work together.

“There is almost no disincentive, because the penalty is so low for a thief to do this repeatedly,” said Representative Debbie Wasserman Schultz, another Democrat who has introduced a bill. She said her South Florida office had been inundated with complaints about tax-fraud theft in the past year.

Flora Goldberg, an 80-year-old Broward County resident, provided one of them. Last year, she did what she has done for decades: she filed, or tried to file, her tax return, this time electronically. But she quickly received a message saying her claim had already been processed. One month later, she got a letter informing her that she had been a victim of identity theft.

Impatient with the bureaucracy and the delays in getting answers, she called her congresswoman. She received her $4,000 refund in December.

“After I got the letter, then I was a little hysterical,” Ms. Goldberg said, adding that the I.R.S. eventually assigned her a personal identification number for future use.

In South Florida and Tampa, the problem has gotten so bad that police officers conducting unrelated searches or simple traffic stops routinely stumble across ledgers with names and Social Security numbers, boxes of stolen medical records and envelopes with debit cards.

The Tampa Police Department set up a special unit last year related to this kind of fraud after officers continued to find an “ungodly amount” of identity-theft material, said Detective Sal Augeri, a veteran on the unit. Last year, the department handled nearly 1,000 incidents; this year, the number is “way, way above that,” he said.

Fraudulent filers first used names and Social Security numbers of the deceased to file claims. The numbers become public by law and, until recently, were easily available on popular genealogy Web sites. Swindlers also used the Social Security numbers of prisoners.

When officials cracked down on those two avenues, the theft migrated to anywhere Social Security numbers are collected. Most vulnerable are records from health care facilities, assisted-living centers, schools, insurance companies, pension funds and large stores that issue credit cards. The police say employees steal the information and sell it, an increasingly common practice here.

Everyone is susceptible. Two dozen Tampa police officers, including one whose job it is to investigate identity-theft fraud, had their identities stolen and their tax refunds diverted this year.

Career criminals know easy money when they see it. The police say they run across street corner drug dealers and robbers who have been in and out of prison for years now making lots of money by filing fraudulent returns. Some have been spotted driving Bentleys and Lamborghinis.

“A gentleman, a former armed robber, said: ‘I’m not doing robberies anymore. This is much cleaner. I don’t even have to use a gun,’ ” said Sgt. Jay J. Leiner of the economic crimes unit in the Broward Sheriff’s Office, which has formed a multiagency task force.

Mr. Ferrer, the United States attorney, said he had seen tax fraud overtake violent crime in Overtown, a poor, high-crime section of Miami. He said criminals there were holding filing parties, at which they would haul out laptops and, for a fee, teach others how to run the swindle.

“There is no real competition,” Mr. Ferrer said. “They are not fighting each other. Altogether, they are stealing from the I.R.S.”





June 1, 2012

The Mortgage Fraud Fraud
By JOE NOCERA

I got an e-mail the other day from Richard Engle telling me that his son Charlie would be getting out of prison this month. I was happy to hear it.

Related in Opinion
Joe Nocera: No Mortgage Lenders in Jail, but a Borrower Lands There (March 25, 2012)
Charlie’s ordeal isn’t over yet, of course. When he leaves prison on June 20, Charlie, 49, will move temporarily to a halfway house, after which he will be on probation for another five years. And unless he can get the verdict overturned, he will have to spend the rest of his life with a felony on his record.

Perhaps you remember Charlie Engle. I wrote about him not long after he entered a minimum-security facility in Beaver, W.Va., 16 months ago. He’s the poor guy who went to jail for lying on a liar loan during the housing bubble.

There were two things about Charlie’s prosecution that really bothered me. First, he’d clearly been targeted by an agent of the Internal Revenue Service who seemed offended that Charlie was an ultramarathoner without a steady day job. The I.R.S. conducted “Dumpster dives” into his garbage and put a wire on a female undercover agent hoping to find some dirt on him. Unable to unearth any wrongdoing on his tax returns, the I.R.S. discovered he had taken out several subprime mortgages that didn’t require income verification. His income on one of them was wildly inflated. They don’t call them liar loans for nothing.

Charlie has always insisted that he never filled out the loan document — his mortgage broker did it, and he was actually a victim of mortgage fraud. (The broker later pleaded guilty to another mortgage fraud.) Indeed, according to a recent court filing by Charlie’s lawyer, the government failed to turn over exculpatory evidence that could have helped Charlie prove his innocence. For whatever inexplicable reason, prosecutors really wanted to nail Charlie Engle. And they did.

Second, though, it seemed incredible to me that with all the fraud that took place during the housing bubble, the Justice Department was focusing not on the banks that had issued the fraudulent loans, but rather on those who had taken out the loans, which invariably went sour when housing prices fell.

As I would later learn, Charlie Engle was no aberration. The current meme — argued most recently by Charles Ferguson, in his new book “Predator Nation” — is that not a single top executive at any of the firms that nearly brought down the financial system has spent so much as a day in jail. And that is true enough.

But what is also true, and which is every bit as corrosive to our belief in the rule of law, is that the Justice Department has instead taken after the smallest of small fry — and then trumpeted those prosecutions as proof of how tough it is on mortgage fraud. It is a shameful way for the government to act.

“These people thought they were pursuing the American dream,” says Mark Pennington, a lawyer in Des Moines who regularly defends home buyers being prosecuted by the local United States attorney. “Right here in Des Moines,” he said, “there was a big subprime outfit, Wells Fargo Financial. No one there has been prosecuted. They are only going after people who lost their homes after the bubble burst. It’s a scandal.”

The Justice Department has had a tough run recently. Last week, Eric Schneiderman, the New York attorney general — who was recently given a role by President Obama to investigate the mortgage-backed securities issued during the bubble — complained publicly that he wasn’t getting the resources he needed from the Justice Department. And, of course, on Thursday, a federal judge declared a mistrial on five charges of campaign finance fraud and conspiracy in the trial of the former presidential candidate John Edwards.

In the Edwards case, the Justice Department spent tens of millions of dollars, and trotted out novel legal theories, to prosecute a man who was essentially trying to keep people from discovering that he had had a mistress and an out-of-wedlock child. Salacious though it was, the case has zero public import. Yet this same Justice Department isn’t willing to use similar resources — and perhaps even trot out some novel legal theories — to go after the pervasive corporate wrongdoing that gave us the financial crisis and the Great Recession. (I should note that the Justice Department claims that it “will not hesitate” to prosecute any “institution where there is evidence of a crime.”)

Think back to the last time the federal government went after corporate crooks. It was after the Internet bubble. Jeffrey Skilling and Kenneth Lay of Enron were prosecuted and found guilty. Bernard Ebbers, the former chief executive of WorldCom, went to jail. Dennis Kozlowski of Tyco was prosecuted and given a lengthy prison sentence. Now recall which Justice Department prosecuted those men.

Amazing, isn’t it? George W. Bush has turned out to be tougher on corporate crooks than Barack Obama.