The federal judge overseeing the Southern District in Florida request by the IRS for details on 52,000 accounts held by U.S. clients has asked for the Service to confirm whether the Obama administration supports the IRS position on this matter.Judge Gold notes that "I request that the Attorney General or his designee shall determine whether the United States intends to file a Statement of Interest, pursuant to 28 U.S.C. [section] 517, independently of the memorandum of law to be filed in support of enforcement of the Internal Revenue Service summons at issue in this case. In its amicus curiae brief, the Government of Switzerland claims, among other matters, that enforcement of the subject John doe Internal Revenue Service summons is inconsistent with the treaty obligations of the United States and with principles of international comity. ... I believe it prudent to invite the Attorney General to directly address the issue raised by the Government of Switzerland on behalf of the executive branch of the United States, including its Department of State." The Statement of Interest must be filed before June 30, 2009, else the judge noted that he will assume that the IRS is speaking for the entire executive, including the Department of State.
Note that Switzerland appears to hope that its offer to negotiate a somewhat more liberal information sharing provision in future treaties will serve as leverage in this dispute. See Switzerland no Pushover on Taxes, Forbes, May 1, 2009. Of course, the problem there is that a minimal loosening of Swiss banking secrecy doesn't cut the mustard--what is needed is an annual reporting of US client account information, without any requirement of specificity of identification or of tax evasion. The whole point of secrecy is that the US doesn't have the information to establish either the holder's ID or the holder's tax evasion purpose. If all renegotiation would give is a mere appearance of greater exchange of information but no real improvement, the Swiss will continue to make money out of helping wealthy US citizens escape their US tax liabilities. I think the US should call the Swiss bluff on this one.
Order Response (on BNA)
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