He Survived

Survivor winner Richard Hatch, that we commented on after we noticed him on Boston Globe's list of famous tax scandals, is out of jail after serving four years for tax evasion, reports Usmagazine.com. He was sentenced to just over four years for not paying taxes on his million dollar winnings. He won early release for good behavior and will be hanging out at the local halfway house for a few months. Hatch maintains his innocence and felt he had shoddy legal representation.

Castrovenes Update

The AP reports that the tax evasion trial Helio Castroneves has come to an end. The defense has been one of ignorance, his lawyers say Castroneves signed anything put in front of him. The reports says that documents and witnesses presented support the prosecution's claims the the crime was intentional and done to get out of pay $2.3 million in taxes. Closing arguments for the defense should be this afternoon.

First to Fall - UBS Client Edition

An accountant from Boca Raton has been arrested and charged with filing a false tax return. His is the first arrest of a major American client of UBS, which is accused of helping Americans evade taxes. UBS has admitted to conspiracy to defraud the US.

Still Dancing with the IRS

Joann Levitt and IRS agent testified this morning that the Indy 5000 winner Helio Castroneves owes at least $2.3 million Levitt is the final prosecution witness and the defense will present its case next week.

The IRS is accusing Costroneves of of setting up a Panama-based shell corporation solely for the purposes of protecting U.S.-earned income from the IRS. Then they used stall tactics to keep royalty payments frozen until they come come up with a plan to have them delivered to an off-shore tax haven, most likely Monaco.

Convicted Tax Cheat Partying in Dubai Makes the Feds Mad

Wesley Snipes took a detour to Dubai for New Years and it has irritated the federal prosecutors who convicted him of income-tax evasion.

Sentenced to three years, Snipes is free on bond pending appeal. He was photographed mixing it up with the other VIP guests, which included Denzel Washington, Michael Jordan, Charlize Theron and Janet Jackson.

He is allowed to travel on work-related film projects, but his wings may be completely grounded because of that unauthorized stop.

Snipes is asking permission to go to Namibia and Italy to shoot for the movie Gallowwalker and action flick Game of Death.

But the prosecutors don't like it at all.

"Defendant Snipes abused the court's trust and did so in a very public way. For that reason alone, the court should deny his current request for international travel."

Snipes side says, "It is essential that Mr. Snipes complete this project to satisfy his civil tax liabilities and provide for his family."

Snipes was convicted nearly a year ago of failing to file federal tax returns on at least $11 million in income earned between 1999 and 2001. He was ordered last August to reimburse the court for $217,363.75 in legal fees.

Dancing with the IRS - Part 2

Two-time Indy 500 winner and Dancer with Stars, Helio Castroneves allegedly helped to pull off an elaborate tax fraud scheme involving unusual financial instruments in Panama and the Netherlands. According to Sports Illustrated, a conviction would ruin his career. He would face up to six and a half years in prison and, as a non-U.S. citizen, possible deportation. He could also lose his contracts with Penske Racing and product endorsement contracts.

He has been accused of using a Panamanian bearer share corporation to hide taxable income. These use of such a corporation routinely triggers suspicion.

Under Panama law a bearer share corporation can be formed that is owned by the possessor of the physical certificates of stock with no recorded owner on record anywhere. The government of Panama does not even know who the owner of the offshore corporation is. Shares for a Panama Corporation do not have to have the owners name on them and they do not have to be kept in Panama. The books and records do not have to be kept in Panama either. If the offshore corporation is Panamanian, banks in Panama, has a resident address in Panama yet has offshore derived income it pays no Panama taxes and does not even need to file a Panama tax return. This is a true bearer share corporation.

There is no Corporation Ownership Registry in Panama and transfers do not have to be reported making trails extremely difficult to follows. Panama has no tax treaties of any sort with any country. A person sets up a corporation for someone else and then submits resignation letters and transfers the certificates privately with no record of sale.

Seven Promotions was created and controlled by at least one member of Castroneves' family, but possibly not by Castroneves himself according to Sports Illustrated. The legal privacy afforded to bearer share corporations makes untangling Seven Promotions' true ownership and control difficult.

The prosecution contends that Castroneves, his sister, and at least one other family member created and controlled Seven Promotions to camouflage about $480,000 in taxable income. The defense insists that Castroneves' father, Helio Castroneves, Sr. created and controlled the company not the son.

Another charge is that Castroneves, his sister, and his attorney devised a way to mislead Penske Racing into depositing Castroneves income into a Dutch company without any withholding. With his $5 million tucked away in the Netherlands, Castroneves would eventually move from the United States to a tax-haven country where residents pay no income taxes.

Can the government prove that Castroneves had a material role in Seven Promotions? The cloaked nature of the bearer share corporation may make it difficult to prove. However according to WEAR-TV ABC, an Attorney testified yesterday that he was involved in contract talks with Castroneves in 1999. He claims the race car driver told him at that time he wanted his money to go to a Panamanian entity that he owned. The case also includes charges of improper business deductions and failure to report in-kind gifts. Trial is expected to last several weeks.

I Guess He Thought No One Noticed

Tax scandals of the rich and famous from the Boston Globe.

Richard Hatch, the first winner of "Survivor" didn't report his million dollar prize and is serving four years and three months in federal prison.

. . . and Abbot and Costello? Say it isn't true . . .

Dancing with the IRS

Brazilian race driver and "Dancing With The Stars" champ Helio Castroneves may face jail time if he is convicted at a federal tax evasion trial that will begin this month. He is accused of conspiring with his business manager sister and an attorney to hide income offshore.

Castroneves won the Indy 500 in 2001 and 2002 and TV's "Dancing With the Stars" competition in 2007.

The Shame of It

Michigan is considering cybershaming it's biggest tax deadbeats. California began doing that in 2007. Their list is always interesting because includes famous people. O.J. Simpson and Dionne Warwick have appeared on the list as some of the worst cheats. It wasn't without controversy when it began, but according to this article, it's pretty effective. They collected 5.4 million dollars in overdue taxes last year.

18 states already have adopted the concept.
"Debtor's Corner" in South Carolina
CyberShame in Louisiana

Connecticut pioneered the approach in 1997 and has raked in about $200 million since.

Maybe we'll need that new jail

CBS News Investigative Correspondent Sharyl Attkisson reports.

And guess who's turned up in a new government report about tax havens?

Eleven giant recipients of your bailout tax dollars -
American Express
AIG
Bank of America
Citigroup
General Motors
GMAC
Goldman Sachs
JP Morgan Chase
Merrill Lynch
Morgan Stanley
Wells Fargo

Together they've collected more than $227 billion.

One favorite among the bailout companies is the Cayman Islands. There's no income tax, no corporate tax and no capital gains tax.

Goldman Sachs has 15 subsidiaries there. Bank of America: 59. Citigroup: 90.

But Morgan Stanley beats them all with at least 158

None of the bailout companies CBS contacted would talk, except AIG which told CBS their operations do not "exist solely for tax benefit."

Indispensible Men

Reaction ay the NY Times Room for Debate Blog on the Tax-doging appointees? Almost universal disgust.

• “The cemeteries of full of indispensable men.” - Georges Clemenceau

• THAT’S WHY HE HAS TO GO! The taxes are just the icing on the corrupt, don’t play by the rules cake.

I’m tired of this crap. Daschle should be passed over.

. . . our tax laws are too complicated . . . unless specialized in tax law, even lawyers have a tough time following and understanding [them].

They should put their money where their mouths are and pay the penalty.

How hard would it be to require all congressmen to have their tax returns vetted before they can run for office?. My guess is that the boon to the national treasury would be very much worth the effort.

[They] should do the honorable thing and disqualify themselves. Today!. So much for change…it’s the same old..same old story.

I can believe Mr Daschle made an innocent mistake. We all take transportation for granted. However, Mr Geithner is a crook.

Perhaps this is Obama’s plan for funding the bail out, get all the politicians and fat cats to pay their back taxes.

In arithmetic, an error is equally likely to be above or below the correct number. So, how come these folks never make an “error” in the IRS’s favor?

Tax cheats like Mr. Geithner and Senator Daschle do not deserve the public’s trust. Their “dog ate my tax return” excuses only deserve ridicule.

I do not think I would receive the same breaks from the IRS.

So much for “change we can believe in.”

20 billion?

MIAMI (Reuters) - The former head of UBS AG's wealth management business, Raoul Weil, was formally declared a fugitive on Tuesday after failing to surrender to U.S. authorities on charges of conspiring to help wealthy Americans hide assets from U.S. tax authorities.

Prosecutors in Miami released a copy of a judge's brief order putting Weil on the court's fugitive list, but said they would have no further comment.

An indictment unsealed in November alleged that Weil and other unidentified bankers conspired to help 17,000 Americans hide $20 billion of assets in Swiss bank accounts in order to avoid paying U.S. taxes.