There’s a very good chance that you haven’t heard of Raoul Weil, but the tax evasion case that he was wrapped up in likely had a major impact on every U.S. citizen who keeps money overseas. Weil was a former executive at UBS — a financial giant in Switzerland — and he stood accused of propagating a conspiracy when he aided and abetted U.S. citizens who wanted to keep their money overseas and out of the reach of the Internal Revenue Service.
Weil was recently acquitted of the charges against him, namely because the prosecution relied on witnesses who outlined Weil’s alleged tactics — and a jury didn’t believe the witnesses.
So why is this case such a big deal? How could this case play a huge role in the way the United States and the IRS pursue tax cases that involve money in international institutions?
The U.S. has embarked on a remarkable path to try to reign in money and finances that its citizens keep overseas. Part of this plan involves a law called FATCA — the Foreign Account Tax Compliance Act — and the law’s scope and reach left many people thinking that when it was fully phased in as a law (which recently occurred) it would cause havoc for taxpayers who had money overseas.
But now some people think that the Weil case, though not a death knell by any means, is a significant blow to the idea that the U.S. could lock down assets and finances held in other countries. The U.S. isn’t powerless, obviously — but the Weil case is a reminder that the IRS isn’t all powerful.
Source: Wall Street Journal, “Weil Acquittal Complicates U.S. Tax-Evasion Crackdown,” Andrew Grossman, Nov. 4, 2014