IRS 'to talk to accountants over foreign banks'

3 July 2008

Tax authorities in the US have called together accounting giants in order to investigate the role of foreign banks in tax evasion cases, Bloomberg reports.

The Internal Revenue Service (IRS) is to discuss the matter in a conference call with the six firms next Tuesday, in order to get advice on how best to tackle the complicity of financial firms in wealthy clients who hide their assets in order to avoid income levys.

News of the move comes following the revelations of the trial of ex-UBS employee Bradley Birkenfeld, which is ongoing.

The banker has already pleaded guilty in the Miami court to helping clients hide $20 billion - and prosecutors gained the right to oblige the Swiss bank to reveal the identities of these tax dodgers from his trial judge earlier this week.

Writing in an email to the six accountancy firms, deputy IRS commissioner Barry B Shott commented: "We are concerned generally by what we are seeing and hearing [about the banks]."

Under the terms of the Qualified Intermediary program, established in 2000, foreign banks have agreed to confirm to the IRS American depositors' identities and how much they have in their accounts.

However, it is widely thought that some firms consistently break this promise.

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