Swiss banking giant Credit Suisse is facing allegations of helping wealthy Americans hide billions in taxable income from Uncle Sam.
A U.S. Senate subcommittee report found that the bank may have helped people shield as much as $12 billion in assets held at the institution, reports The Washington Post’s Danielle Douglas. The Senate report alleges that Switzerland’s second-largest bank helped people disguise Swiss accounts by opening them in the name of offshore shell entities.
But it’s not just wealthy people who want to cheat on their taxes. A poll by the Internal Revenue Service Oversight Board found that 12 percent of Americans believe it’s okay to cheat on their taxes, reports CNN’s Blake Ellis.
“They justify not paying because they are paying all they can for something more important,” Valrie Chambers, a professor of accounting at Texas A&M University, told CNN.
Oh, and here’s something interesting: Cheaters may never win, but people who turn them in could. The IRS Whistleblower Office pays money to people who blow the whistle on tax cheats. Ellis reports that the IRS will pay 15 percent to 30 percent of any amount exceeding $2 million that it collects from the tax cheat. You get your money if you provide specific and credible information that results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer, the IRS says.
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Color of Money Question of the Week
Would you squeal on a tax cheat? Send your responses to email@example.com. Put “Tax Cheats” in the subject line, and include your full name, city and state.
Cuts in the Defense Department budget could eat away at savings for military personnel. The Pentagon’s 2015 budget proposal includes a $1 billion slash in subsidies that make purchases at on-base supermarkets cheaper than non-military-run grocery stores, reports Bill Briggs of NBC News.
The savings isn’t chump change. With the subsidies, a family of four can save $4,500 a year, or 30 percent in savings compared to retail grocery stores, CNNMoney quotes the Defense Commissary Agency. Under the new proposal, the savings would drop to 10 percent, or about $1,500, reports Jennifer Liberto.
“Military families accused Pentagon brass of losing touch with the household budgets of men and women financially and emotionally strained by a decade of war,” writes Briggs of NBC News.
America Saves Week
We are coming to the close of a week set aside to encourage people to save.
This week, organizations have been encouraging people to participate in America Saves Week. The Consumer Federation of America manages America Saves, a nationwide effort all year long to boost personal savings.
To highlight the importance of saving, America Saves spotlights people who have made the commitment to save. Read their stories here.
You’ve still got time to jump on board the effort. In a recent column, I provided a day-by-day plan to start saving. Today, I challenge people to boost their retirement savings. Click here for the daily assignments I gave folks.
Join me for a Live Chat Today
Need some inspiration to find your inner entrepreneur?
If so, join me today at noon ET for my regular live online financial discussion. My guest is Kimberly Palmer, author of “The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life.” Her book was this month’s pick for the Color of Money Book Club. Palmer will discuss ways to supplement your income by having a side hustle.
Hang Out With Me on Google
Join me next week for a live Google Hangout Q&A on how to do a budget. I’ll take you through a budget spreadsheet I’ve created to help you balance your household budget to get rid of debt and save for the things you need and want. Click here to RSVP and for more information.
Send in your questions in advance by leaving a comment on the event page or tweeting me @SingletaryM.
I promise this won’t be a boring budget session.
Taxing Sochi Medal Winners
A bill in the House proposed to exempt Olympic athletes from paying federal taxes on income they receive for winning a medal in the Sochi Winter Games, reports Pete Kasperowicz for The Hill blog Floor Action.
For last week’s Color of Money Questions, I asked: “Should Olympic medalists have to pay taxes on their prize money?”
Here are some responses.
“Absolutely, they should have to pay taxes!” wrote April Spence of Waldorf, Md. “Congress cannot start favoring one group of people just because they are good athletes representing the U.S. at the Olympics. I believe this will start causing discrimination issues if Congress starts favoring other groups of people. On a lighter note, if the bill is passed, I’m switching careers!”
Richard Coleman of Alexandria, Va., wrote: “They can expect endorsements and paid appearances, so we will not be imposing a hardship. We should tax all their earnings... We should not feel bad about taxing the top achievers because to give them a tax exemption is just a feel-good gesture with no validity.”
However, Lisa Moran of Austin thinks Olympic medal winners shouldn’t pay taxes on their winnings. She wrote, “These Olympic athletes train for years, sometimes starting as soon as they’re able to walk, and they’re not getting paid during those years of hard work.”
Tia Lewis contributed to this report.
Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C., 20071, or firstname.lastname@example.org. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to www.postbusiness.com.