IRS Targets Tax Shelters In Israel


Now that Switzerland is no longer a safe haven for foreigners to hide their money, the Internal Revenue Service is targeting Israel.

The Jewish state has reportedly become a favorite spot for money launderers and tax evaders and the IRS is now set to pounce with the help of Israeli Prime Minister Benjamin Netanyahu and his economic social cabinet, according to the Israeli newspaper Globes.

It said the cabinet is on the verge of approving the start of talks leading to an information sharing agreement between the IRS and the Israel Tax Authority. A decision by this body is said to have the same validity as a decision by the full cabinet. Once talks are approved, they are expected to quickly lead to an agreement that would allow the IRS full access to the accounts of U.S. citizens in Israeli banks and other financial institutions.

The proposed agreement is said to contain clauses designed to prevent IRS abuses. It was prepared by the Ministry of Finance and is said to cover the financial assets held by companies in which U.S. citizens have a material interest. And it would be reciprocal so that the IRS would send to Israeli tax authorities information about the income of Israeli residents in the U.S.

Globes said this agreement is expected to be the basis of similar agreements with other nations.