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Majority of Swiss Parliament Votes For Greater Banking Transparency

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    In a previous posting, I reported that at a Senate subcommittee hearing with Credit Suisse and the DOJ, Credit Suisse executives stated that Congress needed to ratify the 2009 tax treaty between the United States and Switzerland before they could release the names of their U.S. clients due to a fear of violating Swiss secrecy laws. It now appears like there is another solution for the IRS Criminal Investigations Division, to acquire the identifying information on account holders suspected of tax evasion.

    On Thursday, March 6, 2014, the Swiss parliament approved a decision stating that those “people whose information is being sent to another country do not have to be informed of this if the other country can prove that telling them would hinder the investigation.” Prior to this decision, Swiss law disallowed the government from releasing such information without first giving notice to the accountholder. Thus, the accountholder could file suit to seek to prohibit the Swiss government or banks from disclosing the identifying information.

    One reason the majority of the Swiss parliament voted to approve this decision is due to the global movement to increase tax transparency by the OECD. It may also be due to the Foreign Account Tax Compliance Act (FATCA). FATCA requires foreign financial institutions to all accounts in excess of $50,000 that belong to U.S. citizens and green card holders, regardless of whether they live in the U.S. or abroad. Any financial institutions that do not comply with FATCA will incur a 30% gross withholding tax on all financial transactions.

    Thus, if you have an undisclosed Swiss account – beware! Your identifying information may be handed to the IRS Criminal Investigations Division without your knowledge. The penalties for not filing an FBAR for your foreign account with the IRS are severe. For each tax year that a taxpayer is convicted for income tax evasion, a five-year jail sentence is possible along with a fine of up to $250,000 and costs of prosecution.

    There may be a solution to your problems though. Let me help you make a voluntary disclosure and avoid serving jail time. Do not wait – I am most effective at minimizing your odds of facing criminal tax exposure when you speak to me early in a civil investigation before the IRS audits or criminally investigates or you.


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