Employees from the US Nonprofit housing group ACORN were fired after being caught on hidden camera assisting a man posing as a pimp and a woman pretending to be a prostitute, advising them to lie to the Internal Revenue Service (IRS) and giving guidance on how to claim underage girls from El Salvador as tax dependents.

Initially, two ACORN staffers from the Baltimore office were fired on Thursday, September 10, for recommending illegal activities to secure a housing loan. 24 hours later two ACORN staffers in the Washington office were also fired for offering to help the same “pimp” and “prostitute” secure a loan.

25-year-old independent filmmaker James O’Keefe, posing as the pimp, secretly taped the meeting that have ignited calls for investigations of ACORN, the Association of Community Organizations for Reform Now.

ACORN’s leaders said Friday they were “appalled and angry” at what their employees had done, but insisted the videos were part of a political “smear” campaign and not representative of the institution as a whole.

“But that does not excuse the behavior of the employees,” wrote ACORN’s president Alton Bennet and executive director Mike Shea. “We have fired them and are initiating an internal review of practices and reminding all staff of their obligation to uphold the highest legal and ethical standards.”

Rep. Charles Boustany, R-La., called for a hearing to investigate ACORN’s tax filing assistance programs following the release of the videos he said suggested multiple incidents of tax fraud.

“In light of the apparent flagrant and willful attempts to suborn tax fraud, I … (am seeking) a hearing of the Oversight Subcommittee of the House Ways and Means Committee as soon as practicable to investigate ACORN’s activities,” he said Friday.

O’Keefe was accompanied by 20-year-old Hannah Giles, posing as a prostitute. They both sought help from ACORN workers in Baltimore, who advised them how to falsify tax forms and seek illegal benefits for young girls from El Salvador they wanted to smuggle in as prostitutes.

“There’s like 10 girls,” O’Keefe says. “There’s ten El Salvodoreans.”

The ACORN staffer replies, “I understand what you are saying.”

ACORN — the Association of Community Organizations for Reform Now — calls itself a network of families “working together for social justice and stronger communities,” according to its Web site.

The organization has been accused by Republicans and conservatives of committing fraud in voter registration drives.

“Taxpayers should be outraged that their money has gone to an organization that, in addition to facing charges of voter fraud and tax violations, is willing to facilitate prostitution,” said Rep. Steve King, R-Iowa.

“As this video confirms, ACORN continues to operate as a criminal enterprise.”

The videotape was made public Thursday, September 10 by BigGovernment.com. Portions of the video were aired throughout the day on FOX News.

source: Fox News

According to the NY Times, Switzerland recently announced it would help global authorities pursue tax cheats.

The surprise announcement came after a similar shift by two other European tax havens, Liechtenstein and Andorra, on Thursday.

The moves deal the biggest blow yet to European traditions of banking secrecy and come amid a global crackdown on tax evasion. The three governments agreed to cooperate with authorities in the United States and elsewhere in investigating tax evasion and, under certain circumstances, to turn over data on accounts at banks headquartered within their jurisdictions.

“The adoption of the O.E.C.D standards is a significant signal that bank secrecy as it has existed for generations is coming to an end,” said Scott D. Michel, a tax lawyer at Caplin & Drysdale in Washington, D.C.

Switzerland is not abandoning its banking secrecy laws, but rather adopting the definition of tax evasion used by the 30-nation Organization for Economic Cooperation and Development.

Switzerland was placed this week on the O.E.C.D.’s list of uncooperative tax havens, which also includes Andorra, Austria, Hong Kong, Liechtenstein, Luxembourg, Monaco and Singapore. It has also come under pressure from the British prime minister, Gordon Brown, who last month threatened to disinvite Switzerland to a meeting in London next month of the Group of 20 leading nations. Austria and Luxembourg have also agreed to adopt the organization’s definition of tax haven.

Switzerland is home to a third of the estimated $7 trillion hidden offshore globally.

Switzerland, unlike the United States and many other countries, distinguishes between tax fraud and tax evasion, and does not consider tax evasion to be a crime. But by adopting the O.E.C.D. definition, it will now cooperate with countries with which it has information-sharing treaties in pursuing tax evasion.

Those countries must already possess names of clients suspected of tax evasion, and then ask Switzerland for assistance.

“The privacy of foreign clients not under suspicion will continue to be protected by Swiss bank-client confidentiality,” the Swiss Bankers Association said on Friday. “An automatic exchange of information is excluded.”

UBS, the Swiss bank, averted indictment last month and agreed to pay $780 million to the Justice Department to settle charges that it helped scores of wealthy Americans evade taxes through secret offshore accounts.

UBS declined to comment.

Here are some key facts about Switzerland’s bank secrecy:

BANK SECRECY:

- Sharing information about bank client data is a criminal offence in Switzerland. Banks are forbidden from handing over bank client data directly to foreign authorities even if requested to do so. Switzerland’s protection of banking secrecy goes back to 1934 when it passed a law imposing heavy penalties, up to and including prison sentences, for breaches of banking secrecy.
TAX FRAUD/TAX EVASION:

- Unlike most other countries in the world, Swiss law distinguishes between tax fraud and tax evasion. Tax fraud is a criminal offence that involves actively forging documents to hide income from the tax man. Tax evasion, which is defined as not fully declaring one’s income to the Swiss tax authorities, is an administrative offence, punishable with a fine as the law accepts that citizens can sometimes innocently forget data or make mistakes when filing their tax returns.

Tax evasion is distinct from tax avoidance, which is the legal exploitation of tax loopholes to minimise tax payments.

TAX INFORMATION SHARING

- Switzerland can share tax information under a so-called administrative process enshrined in tax treaties signed with the United States and other countries. Up until now, it has mainly shared information on tax fraud.

Banks supply information requested by foreign governments pursuing criminal investigations of individuals, but this does not automatically extend to tax matters.

Swiss law requires the other jurisdiction demanding the information to come forward with a detailed claim about a precise individual. Berne does not offer cooperation in the case of blanket requests for data.

THE UBS TAX FRAUD CASE

- UBS (UBSN.VX)(UBS.N), Switzerland’s largest bank, became the target of a U.S. investigation alleging the bank had helped thousands of Americans to hide money from its tax authorities in Swiss bank accounts. In a landmark settlement, UBS agreed to pay a $780 million fine in February. Berne also agreed to the transfer to the U.S. of a few hundred UBS client names even before a Swiss court had ruled on whether tax fraud had been committed.

EU SAVINGS DIRECTIVE

- Switzerland allows European Union account holders to keep their affairs secret by paying withholding tax on the interest of savings from their income instead.

Switzerland shares the bulk of the revenues collected in this way with relevant EU governments without revealing the identity of the EU bank account holders. The matter is regulated by the so-called EU savings tax directive.

It seems the reason Switzerland is now agreeing to bend on it’s bank secrecy policies is to gain some leverage in the U.S. investigation of it’s largest bank, UBS, which is alleged to have helped thousands of Americans hide money from the IRS in Swiss bank accounts.  With a new president and a need for more cash, the Swiss know the U.S. government is serious about pursuing this lost tax revenue.

source: Reuters, NY Times