On Thursday (when I was at a conference and out of blogging action) the FT reported that:
The US Internal Revenue Service is to solicit the help of the world's top accounting firms in its widening effort to clamp down on offshore tax evasion.
The IRS is planning to speak on Tuesday to six accounting firms about how they could help find foreign banks that fail appropriately to identify US customers holding investments or income in offshore accounts, according to people briefed on the plan. A conference call has been scheduled between the agency and Deloitte, Ernst & Young, KPMG, PwC, Grant Thornton, and BDO Seidman, they say.
This is absurd. The firms in question are some of the principle architects of tax haven structures. They are the almost universal consistent element to be found in every offshore financial centre. The know they have created a world in which tax evasion is not only possible, but happens. They helped created it to make money. They're not going to kill the golden hen that brings them so much profit.
It's precisely why PWC and Deloittes joined with Citi and HSBC to offer bland and inane comments on tax havens to the Treasury Select Committee last week.
It's why in Tax Havens: Creating Turmoil I argue that it is the accountants as well as the lawyers and bankers who need to be regulated now. It is precisely because regulators continue to make this sort of elementary mistake in the approach they are taking by somehow thinking the accountants are on their side that I am convinced the change we propose is essential.