Income Tax and Accounting for Essay

However, a related New York Times article on the story reported: "In court papers, the I.R.S. said that First Data had actively marketed and sold offshore services to American merchants, typically investment and Internet-commerce advisory shops, who in turn used the service to help their clients hide taxable income…In 2002, the unit [Cardservice International and now called First Data Independent Sales] which works with 3,200 independent sales offices and agents to sell and provide financial processing services, began marketing offshore processing services with First Atlantic Commerce, an e-commerce company in Bermuda, according to court documents" (Browning 2009). The IRS states that First Data, "clearly markets offshore merchant account services to U.S. merchants as a means of tax avoidance by advertising its services on the Web sites of foreign promoters of abusive offshore tax schemes and products" (Browning 2009).

The pressure placed upon First Data is emblematic of the greater scrutiny upon offshore banking in general. Nations known for creating tax havens like Belgium and Switzerland have been subject to greater criticism and scrutiny by the other world powers. A recent editorial fumed: "Senate investigators estimate that Americans who hide assets in offshore bank accounts are failing to pay about $100 billion a year in taxes…The Tax Justice Network, a research and advocacy organization, estimates $11.5 trillion in assets from around the world are hidden in offshore havens" (100 billion, 2009, The New York Times). On the part of accountants and financial institutions everywhere, more scrupulous attention to upfront banking and reporting practices are demanded and companies such as First Data cannot be relied upon to shield clients' names.Throughout the nation, there has been more and more outrage building at perceived special 'perks' of wealthy members of the financial industry, such as bonuses and secret deals. Tax shelters are another example of a long-standing hidden method of income enhancement whose illegalities are now being exposed. Nations are working closer together to reveal the existence of offshore accounts, and to make their holders accountable to legal and economic repercussions. It is essential that the accounting profession become more cognizant of changes in the law, greater enforcement of the law, and that it encourage clients to recognize the new realities of the current legal environment.

Works Cited

100 billion the country could use. (2009, March 14). Editorial. The New York Times.

Retrieved April 18, 2009 at http://www.nytimes.com/2009/03/14/opinion/14sat1.html

Browning, L. (2009, April 15). Credit card processor asked for offshore data. The New York

Times. Retrieved April 18, 2009 at http://www.nytimes.com/2009/04/16/business/16tax.html?_r=1&partner=rss&emc=rss

IRS: Offshore account? Tell us now. (2009, March 27). USA Today. Retrieved from Accounting

Net. April 18, 2009 at http://www.accountingnet.com/x66003.xml

Kendall, Brent. (2009, April 15). IRS Seeks First Data names in tax probe. Wall Street Journal

Retrieved April 18, 2009 at http://online.wsj.com/article/SB123982774575122257.html

Pollick, Michael. (2003). What is an offshore bank account? Wisegeek. Retrieved April 18, 2009

at http://www.wisegeek.com/what-is-an-offshore-bank-account.htm.....