WASHINGTON The chairman of the U.S. Senate Finance Committee plans to introduce legislation in the coming weeks to give U.S. tax collectors more tools to police offshore tax evasion, an aide to the senator said on Wednesday.
The draft bill, sponsored by Democratic Senator Max Baucus, seeks to deter offshore tax havens by increasing reporting requirements to the Internal Revenue Service for entities transferring funds offshore and puts more onus on tax preparers to root out wrongdoing.
Evasion of taxes using foreign accounts by individuals and corporations is said to cost the U.S. government $100 billion a year, according to a congressional report.
But the Baucus effort is narrower in scope and seen by some as more lenient than an earlier proposal introduced by Democrat Senator Carl Levin, chairman of an investigative committee in the Senate that has studied and issued influential reports on the topic.
President Barack Obama supported Levin's effort to cracking down on tax havens before he left the Senate for the White House.
Levin's bill focuses more on penalties. For example, it seeks to amend current laws with a penalty of up to $1 million for any person who fails to disclose any offshore holding or transaction involving debt or equity.
The Baucus bill aims to boost some penalties, but on a much smaller scale.
Senator Baucus is conferring with the Obama Administration and other stakeholders, in response to a draft released in March and intends to introduce a bill in the coming weeks, the aide said.
Separately, the United States government is suing Switzerland's UBS AG in attempt to gain names of individuals who may be hiding money in offshore accounts to evade taxes.
A response from the Swiss bank, known for its strict bank secrecy laws, is due in federal court in Florida on Thursday.