TIBERI OPENING REMARKS: SUBCOMMITTEE HEARING ON BANKING SECRECY PRACTICES AND AMERICAN TAXPAYERS
(Remarks as Prepared)
Washington,
Mar 31, 2009 -
Thank you, Chairman Neal. I share many of the concerns you outlined in your statement and look forward to working together on responsible, common-sense steps that will make our efforts to crack-down on individuals who commit tax fraud more effective. Thank you also to our witnesses. I appreciate your willingness to join us today and look forward to your testimony.
Tax evasion – through the use of undeclared offshore bank accounts or by any other means - is a Federal crime. I think we are all in agreement that criminal tax evasion should be pursued aggressively and punished. Not going after the dishonest few who commit criminal acts to the fullest extent possible is unfair to honest, hardworking Americans who pay their taxes and strive to comply with our country’s tax laws.
The on-going events surrounding UBS AG and its admitted criminal role in helping a number of wealthy U.S. individuals evade U.S. taxes have brought a spotlight to bear on international tax enforcement and the tools we have at our disposal to help ensure compliance.
Among those tools is the Qualified Intermediary program. Under the QI program, foreign financial institutions agree to verify the status of foreign investors and collect and remit the appropriate U.S. withholding tax, if any. Recent events have demonstrated a number of areas where the QI program may be strengthened, and I hope we will discuss some of those today.
Additionally, the U.S. has entered into dozens of Tax Treaties and bilateral Mutual Legal
Assistance Treaties with other nations, as well as approximately twenty Tax Information Exchange Agreements.
In short, the United States is not alone in the effort to ensure compliance with our tax laws. A number of frameworks currently exist across government and the private sector. As we proceed with this discussion we should keep in mind that there are willing partners on the international front, and continuing to improve and work through our formal network of information exchanges is the responsible way to move forward. Steps that undermine our international standing could threaten key information exchanges and invite unintended consequences that could do significant harm to our economy’s capital markets.
This hearing is an important opportunity to examine the serious tax compliance issues we face, find out where our current enforcement regime may have fallen short, and explore new tools that may help us fight tax evasion and close the international tax gap.
As we all know, the “tax gap” is defined roughly as what is legally owed, but not collected. I sincerely hope our efforts today will remain focused on issues of compliance. The line between illegal tax evasion and legal tax practices used by U.S. taxpayers around the world is distinct. To blur that line may only make our compliance efforts more difficult.
Thank you again, Chairman Neal, for your leadership on this issue.
