Tax Evasion Crack Down

The European principality, Lichtenstein has reached an agreement to sign an agreement with U.S. authorities on December 8th. This would end years of banking secrecy provided to wealthy Americans and corporations trying to hide assets within the small country. The agreement involves Swiss banks as well as Lichtenstein banks, including LGT Group, controlled by the Lichtenstein ruling family. This will leave Monaco and Andorra as the only places left for Americans to hide their money under bank secrecy laws. The Lichtenstein accord will take affect in 2010 to give the country time to enable legislation. All money will begin being reported to the U.S. starting in 2009, meaning, everyone involved in Lichtenstein banking will have a month to move into tax compliant accounts. If information implicates tax evasion, banking clients can take advantage of IRS leniency by reporting all offshore income before hand. Under the agreement, the principality will be able to report corporation's use of their banks to reduce tax bills.

Corporations attempting to illegally avoid taxes will face large reputational risks to their firms if they are implicated in these evasion schemes. Practices such as these will also affect Swiss and Lichtenstein banks. It is apparent that these banks have been trying to repair their reputations by agreeing to terms with the U.S. in disclosure of these accounts. The U.S. has been pressing the principality's European neighbors to push them into more disclosure. They have been on global blacklists as supporters of money laundering for almost a decade. This agreement moves the world in a safer direction as well as prevents these unpatriotic acts.

http://www.cnbc.com/id/28034065

http://news.bbc.co.uk/2/hi/business/842781.stm

http://www.bloomberg.com/apps/news?pid=20601100&sid=aewltPzw8E7Q&refer=germany