In 2009 the IRS created a special team to investigate when and how the extremely wealthy were avoiding taxes. Reporters Jesse Eisenger and Paul Kiel illustrate how that team was stymied using the case of the heir to a German automative parts fortune.
Tax evaders, rejoice: the Internal Revenue Service may not have enough resources to come after the vast majority of those offshore bank accounts. It also doesn’t have enough resources to investigate white collar crime, curb suspicious corporate activity, shore up the nation’s rising budget deficit, or answer tens of millions of law-abiding taxpayers’ questions. And now, just when morale is at its lowest, the IRS stands to lose a third of its most valuable and experienced workers next year as the organization’s most senior cohort becomes eligible for retirement.
It remains nearly impossible for investors to understand what’s going on inside the big banks—and what risks they’re taking on:
“When we asked Dane Holmes, the head of investor relations at Goldman Sachs, why so few people trust big banks, he told us, ‘People don’t understand the banks,’ because ‘there is a lack of transparency.’ (Holmes later clarified that he was talking about average people, not the sophisticated investors with whom he interacts on an almost hourly basis.) He is certainly right that few students or plumbers or grandparents truly understand what big banks do anymore. Ordinary people have lost faith in financial institutions. That is a big enough problem on its own.
“But an even bigger problem has developed—one that more fundamentally threatens the safety of the financial system—and it more squarely involves the sort of big investors with whom Holmes spends much of his time. More and more, the people in the know don’t trust big banks either.”