The IRS just threw a historic one-two punch at wealthy Americans hiding money offshore
By Laura Saunders Close Laura Saunders Oct. 23, 2020 5:30 am ET U.S. tax officials have thrown a historic one-two punch at wealthy Americans hiding money offshore.
At the same time, the U.S. officials chargedRobert Brockman, a Houston-based billionaire and software CEO who was the sole investor in Mr. Smith’s first private-equity fund, with hiding about $2 billion of capital-gains income from the IRS in secret offshore accounts from 2000 through 2018. Mr. Brockman, 79 years old, pleaded not guilty and was released on $1 million bond.
The public documents in the Smith and Brockman cases offer a new window into the shadowy world of wealthy American tax evaders. They reveal both the large amounts of money involved and the lengths some people will go to in order to hide them—even at a time when tax rates were comparatively low. Mr. Smith admitted that he controlled entities in Belize and the Caribbean island of Nevis that weren’t in his name. Those entities received pretax profits from his private-equity funds. He also controlled undeclared bank accounts in the British Virgin Islands and Switzerland, and he withdrew millions of untaxed dollars from them to buy and improve luxury real estate in Sonoma, Calif. and Switzerland.
The crackdown, which had many facets, allowed the IRS to pierce the veil of bank secrecy in Switzerland and some other countries. As a result, more than 56,000 U.S. taxpayers at risk of criminal prosecution for undeclared offshore accounts entered an IRS limited-amnesty program and paid about $11 billion to resolve their issues. Foreign banks paid more than $6 billion.It’s unclear. But in late 2013 or early 2014, Mr.
Mr. Smith’s trust had charitable recipients, but he wasn’t required to make donations. At the end of 2014, he contributed a substantial amount of offshore assets to the Fund II Foundation, his U.S.-approved charity.
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