UBS, a bank based in Switzerland, has received a subpoena from the IRS for the bank records of 52,000 U.S. citizens. The IRS alleges that the U.S. taxpayers hid money in UBS accounts for the purpose of avoiding paying taxes. UBS had created a program
that recruited tax advisers and their clients under the guise that they could protect their funds from the IRS. Swiss law prohibits banks, under privacy rights, from disclosing information about their customers and their accounts. However, the IRS has obtained a subpoena for the records and a federal judge has issued it because UBS is soliciting business in the United States. One banking minister in Switzerland has indicated, however, that Swiss privacy laws do not apply when there has been fraud. Evaluate the ethics of UBS as well as their customers. If you worked for the bank, would you release the information? Would you place your money in Swiss accounts?
Students should return to the "What if everyone behaved like this?" They could also raise the utilitarian aspect of transferring money in this way to avoid taxes and the avoidance of taxes in the context of the "good of the whole.". International law is different from U.S. laws and there are plenty of areas in which businesses (and here, individuals) can take advantage of the laws and regulations in other countries. The students should reflect the realization that they often demand of companies' behavior in other countries that meets U.S. standards (as with the labor cases), but in this situation individuals choose to take advantage of no taxes via international operations. Few see the parallels in behavior between what they indict companies for, but for which they give individual taxpayers an "atta boy" or "atta girl.".
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