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04.11.2015 02:49 Age: 2 days

Look who's getting away with not paying this estate tax

They say the only certain things in life are death and taxes, but a large number of non-U.S. citizens may have found a way to avoid at least one of those.

Under U.S. tax law, the estates of foreign holders of U.S. assets, such as stocks, real estate, or valuables, are required to pay estate taxes on those assets after the death of the owner. There's even a handy piece of IRS paperwork - form 706-NA - to help calculate the tax.

But one veteran Swiss banker tells CNBC that this rule is widely ignored around the world, and the U.S. government has no way to know how much money it is owed under its own laws.

The result, the banker said, is that the U.S. Treasury is likely being deprived of billions of dollars each year.

The banker, who is wary of the controversy over American tax cheats in Switzerland and asked not to be identified publicly, said the battle over the potentially vast pool of estate tax revenue could be the next front in the global tax wars.

"I'm just waiting for this bomb to blow up," the banker said. "The estate tax, nobody is looking at it."

"There are lots of U.S. assets that are owned by people not living in the U.S.," he said. "At the moment, the U.S. cannot get ahold of it. Look at the people who have houses there. Look at how many people ownApple stock that are not living in the U.S."


Look who's getting away with not paying this estate tax