St. Nicholas' Parish Church and Gutenberg Castle, in the Alpine tax haven of Liechtenstein, which has a population of 35,000.

The US loses about $100 billion annually due to offshore tax evasion, according to a US Senate report that targets Swiss bank UBS and Liechtenstein's royal family controlled LGT Group for allegedly marketing tax-evasion strategies to wealthy Americans. The report says 19,000 Americans have undeclared UBS offshore accounts, with a combined value of $17.9 billion and Liechtenstein royal Prince Philipp who is chairman of LGT, touted for business from tax evaders.

The Permanent Subcommittee on Investigations has scheduled a hearing, "Tax Haven Banks and US  Tax Compliance," today. It will examine how financial institutions located in offshore tax havens, including Liechtenstein and Switzerland, may be engaged in banking practices that could facilitate, and in some instances have resulted in, tax evasion and other misconduct by US clients. The hearing will also examine how US domestic and international tax enforcement efforts could be strengthened.

Today's hearing will include videotaped testimony from Heinrich Kieber, a German citizen and former employee of LGT, who sold a CD-ROM containing LGT client records to the German intelligence service for €4 million. Kieber is being hunted by private detectives hired by Liechtenstein's royal family and is reported to have been provided with a new identity.

Besides the Liechtenstein client list, a probe of UBS activities in targeting wealthy Americans, has provided a throve of information.

Last month, a US federal judge ruled that the IRS (Internal Revenue Service) could serve legal papers on UBS to force the bank to disclose who may have used overseas accounts to hide assets and avoid taxes.

The Justice Department requested the summons after former UBS private banker Bradley Birkenfeld, had pleaded guilty to defrauding the IRS. He is reported to be cooperating with investigators and said in court that UBS has about $20 billion in assets in undeclared accounts for US taxpayers.

Prosecutors charged that Birkenfeld and others helped California billionaire property investor Igor Olenicoff hide $200 million in assets overseas. Olenicoff pleaded guilty last year to tax charges and agreed to pay the IRS more than $52 million.

US taxpayers are required to report all foreign financial accounts if their total value exceeds $10,000 at any point during a given year, prosecutors said. Failure to report the accounts can result in a penalty of up to 50 percent of the amount in the accounts.

The Senate report (not available online at time of our posting) says that Prince Phillipp of Liechtenstein helped wealthy individuals evade taxes by meeting with them in his role as chairman of LGT. Prince Phillipp is the brother to the reigning sovereign, Hans-Adam II, and the uncle of Liechtenstein’s hereditary prince, Alois.

The report also says that "UBS Swiss bankers targeted US clients, traveled across the country in search of wealthy individuals and aggressively marketed their services to U.S. taxpayers who might otherwise never have opened Swiss accounts."

The report states that in some instances, UBS declined to report accounts to the IRS when clients opened them in the names of offshore corporations, trusts, foundations or other entities, even if the bank knew the true beneficial owners were US taxpayers.

In Liechtenstein, the report said the royal family's LGT Group contributed to a "culture of secrecy and deception" that enabled clients to "evade US taxes, dodge creditors, and ignore court orders."