The Liechtenstein Connection

The IRS warned that some 100 Americans were likely to be caught up in its investigation in cooperation with other countries of tax evasion in Liechtenstein. Any U.S. taxpayer hiding income and gains in the tiny principality in the European Alps would do well to “make a prompt and complete disclosure to the Internal Revenue Service,” then Acting Commissioner Linda Stiff said in a news release (see also “Voluntary Disclosure to the IRS: A Viable Option,” JofA, March 08, page 40).

The investigation gathered steam earlier this year when German authorities armed with records of a bank owned by Liechtenstein’s royal family targeted scores of Germans, including several prominent figures. The chief executive of Germany’s postal service resigned after his arrest on charges of evading nearly $1.5 million in taxes. Liechtenstein, smaller than Washington, D.C., is wedged between Austria and Switzerland. It is not a member of the European Union or of the Organization for Economic Cooperation and Development, which has labeled it an uncooperative tax haven.