Tax evaders are “flocking in to confess their sins” to the IRS, reports today’s Wall Street Journal:
“Last week we had 400 [applicants] — four times as many as in all of last year,” said IRS spokesman Frank Keith, who declined to provide more detailed figures.
The “applicants” in question are trying to get into a voluntary disclosure program that began in March, so last year’s number could presumably be as low as zero.
But paying taxes they might otherwise have skipped out on is a new trend for rich people, ever since a UBS banker told the IRS about how he used to smuggle loose diamonds in toothpaste tubes. This led to an investigation that has roiled the banking world, heightened Swiss-US relations, and struck fear into accountants and tax cheats everywhere.
Thus far the government has only prosecuted three UBS clients in the tax sting– out of 780 names handed over by the bank and another 52,000 the IRS is demanding from them. These criminal cases that seem designed less to provoke populist rage than moderately wealthy upper-class fear.
The lastest tax cheat to face prison time, a New York toy entrepreneur named Jeffrey Chernick, sounds almost sympathetic:
Chernick, the third American client of UBS to plead guilty to criminal charges, signed a statement of facts saying he sought in 2008 to reveal his UBS account to the IRS, file amended tax returns and pay back taxes. But Chernick was talked out of it by a lawyer named only as “Swiss Attorney” in the court documents.
Chernick has been accused of hiding $8 million in UBS accounts and sham corporations, and while he was sufficiently paranoid about it to dress up like a tourist when meeting with his bankers to “avoid detection,” he probably rightfully didn’t think he was the sort of big fish the government would go after first — unless they were trying to prove a point.
Which it looks like they are!
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