Letter from a Tax Evader
October 29th, 2009
Dear Martha,
I want to get this letter to you before the lawyers call, which will be any day now. You might ask yourself why you are even hearing from me. I know the last time we exchanged words was when you shouted at me in front of our divorce lawyers—something about the value of our (or what is now my) house. I won that ruling, of course. I hope you’ve finally learned that turning up the volume on your mouth is not as persuasive as solid reason. But dredging up old battles is not the point of this letter.
Martha, I want to put aside differences and be honest with you. It’s the least I can do. I have had a Swiss bank account with UBS for almost ten years. I originally opened the account on the advice of a certain banker, Bradley Birkenfeld; perhaps you’ve seen his name in the news. Or maybe you haven’t. You’ve never bothered much with newspapers. Plus I’m sure you’re much too busy lately spending money from your generous divorce settlement to inconvenience yourself with CNN.
Since you probably don’t know—Bradley Birkenfeld is the man responsible for starting the investigation into American’s UBS accounts. A couple months ago, he was sentenced to three years in prison. What a waste. That man was an outstanding, dedicated manager of my wealth. A friend told me he once stuffed diamonds into a toothpaste tube to bring them into the U.S. for a client—now that’s dedication. It’s really unfortunate what’s happened to him. But what goes around comes around, I guess. Hopefully this will teach a lesson to the next upstart banker who gets any ideas about giving away banking information.
Anyway, that backstabbing UBS bank has given up the identities of 4,450 of its American clients; names that our bankers promised to take to the grave. Most of these depositors were just engaging in some creative portfolio diversification. Perhaps the clients weren’t paying all the taxes they should on those accounts. But if you ask me, with the rates this government has been charging us, I think we have every right to skirt some of these ridiculous taxes. Remember that 18 karat diamond necklace I got you for your birthday, right before the divorce? Well that never would have hung around your neck if it hadn’t been for our Swiss account. No need to thank me, though, I was just doing right by our family.
We don’t have any information on whose names are on this list that the IRS now has. And we are not going to find out for a couple weeks. However, the government offered an “amnesty” program, for which the deadline was October 15th. I didn’t want to take part—honestly I don’t know why the IRS would even blink at a couple million—but I was strongly advised to turn my name in. So I have decided to take the high road (even if it is completely unjust) and I have revealed the bank account to the IRS.
Martha, the lawyers will contact you in the next few days. As you probably have guessed, the account was not revealed during our divorce, so I’m sure some portion is technically yours. Also, though I don’t want to bother with all the legalistic nonsense, you should probably know that you have violated tax laws as well, because your name was also on our income filings.
Yours,
Herman
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Attorney Charles Falk of Porzio, Bromberg & Newman says he had a situation a year ago in which a husband had filed joint tax returns before his divorce. So when the client made a voluntary disclosure to the IRS that he had used a Swiss bank account to evade taxes, his ex-wife was notified of the disclosure as well. She had technically violated tax laws as well because her name was on the income filings, even though she never knew the account existed. A new divorce settlement was reached with the man handing over more money to his ex-wife.
Time Magazine, Friday, August 21st, 2009
This post was inspired by the real case above, but the characters in the letter are fictional. The opinions expressed do not represent those of Global Financial Integrity or the Task Force on Financial Integrity and Economic Development.
I do not mean any offense to Bradley Birkenfeld, who has been monumental in assisting the IRS reclaim millions in tax evading dollars.