Four New Swiss Banks to Hand Over U.S. Account-holder Information

The Swiss Bank Program, an initiative established by the Department of Justice that provides Swiss banks that believe they have violated U.S. laws by setting up or maintaining secret accounts for Americans, has four new participants as of the end of last week. This news means that taxpayer’s who have had an account with one of the four Swiss banks will likely undergo an IRS criminal investigation as their information will soon be transmitted to the Department of Justice and the Internal Revenue Service. If those Americans wish to stay out of a federal prison, they should contact an experienced tax attorney immediately.

According to a press release by the Department of Justice, Luzerner Kantonalbank AG (Luzerner), Habib Bank AG Zurich (HBZ), Banque Heritage S.A. and Hyposwiss Private Bank Genève S.A. (Hyposwiss Geneva) have signed agreements to enter the Swiss Bank Program. The DOJ as stated that the four banks will collectively pay fines of over $28 million.  According to the press release, the four banks materially assisted taxpayers in their efforts to maintain foreign accounts and knew that many of their American customers were failing to comply with American Foreign Bank Account Reporting (FBAR) laws. Further, the banks offered services and financial products that they knew or had reason to know would be used to violate FBAR laws.

The Department of Justice states that the agreement between the four banks and the U.S. government requires that the participating financial institutions must:

  • Make a complete disclosure of their cross-border activities;
  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
  • Cooperate in treaty requests for account information;
  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
  • Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
  • Pay appropriate penalties.

In short, banks that choose to participate in the Swiss Bank Program have weighed the options and determined that they would rather turn against their American customers than risk facing the wrath of the Department of Justice. Every Swiss bank has witnessed the DOJ nearly single-handedly disrupt the Swiss banking industry.

The fear of prosecution that has led a plethora of Swiss banks to enter the Swiss Bank Program has given American taxpayers a reason to take proactive steps to protect themselves from a devastating prosecution. When the IRS believes that a taxpayer may have an undeclared foreign bank account, the taxpayer’s file is handed off to the IRS Criminal Investigation Division for a full inquiry. The DOJ will get involved if the IRS CID believes that a taxpayer willfully violated FBAR laws. A criminal prosecution can result in a taxpayer spending up to five years in prison for each year that a taxpayer is in violation of the law.

The proactivity taken by taxpayers to avoid a prison sentence is the Offshore Voluntary Disclosure Program (OVDP). The exchange is simple: taxpayers who have previously undeclared foreign bank accounts provide the government with information about the account and the taxpayer’s personal and business financial affairs. The taxpayer also agrees to pay back taxes, interest, and a penalty for a promise from the government to not levy a criminal prosecution against the individual. Although the OVDP is a great option for many taxpayers, it is a limited-time offer. If you have a foreign account that has been undeclared until now, the OVDP could be out of the question if the IRS is already investigating your affairs. Thus, if you have an account at one of the banks that has entered the Swiss Bank Program, your time to participate in the OVDP is likely winding down. It is in your best interest to pay a visit to an experienced tax attorney as soon as possible.

Contact an Experienced Tax Attorney Today

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have made assisting taxpayers with participation in the OVDP a major part of their practice. Only an experienced tax attorney can offer a client top-tier criminal tax advice. To ensure that you have a team of zealous advocates working hard for your physical and financial freedom, contact the Tax Law Offices of David W. Klasing today at (800) 681-1295 or online for a reduced-rate consultation.