FATCA Switzerland: FATCA Legislation Approved
On September 23, 2013, Swiss Senate voted to approve the implementation of Foreign Account Tax Compliance Act (FATCA). This event came barely a few weeks after the Swiss House of Representative approved the same legislation.
At this point, Swiss Banks have a clear way to cooperate with the IRS and US Department of Justice in turning over the required information regarding U.S. accountholders in Switzerland.
At the same time, on August 29, 2013, the DOJ announced the creation of the Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”) – a voluntary disclosure program for Swiss Banks.
FATCA Switzerland: What is Driving Swiss Acceptance?
While there may have been strong reasons to oppose the bill, it appears that the driving force behind the acceptance of FATCA by Switzerland has been the fear that Swiss banks would be effectively excluded from the US capital markets if they did not accept FATCA. Most representatives acknowledged that FATCA is a reality, whether Switzerland likes it or not.
FATCA Switzerland: Model 2 Treaty
Unlike most European countries currently engaged in FATCA negotiations, Switzerland opted for the “model two” FATCA implementation treaty. Swiss banks will have to report accounts belonging to US taxpayers with more than $50,000, but client data will only be exchanged once the US authorities have requested administrative assistance (there are exceptions, especially under the Program).
FATCA Switzerland: Impact on U.S. Taxpayers With Undeclared Financial Accounts
The impact on the U.S. taxpayers with undeclared financial accounts is likely to be a dramatic one, though not unexpected. We can already observe a rise in the OVDP (the IRS Offshore Voluntary Disclosure Program) participation and the expectation is that 2014 will reflect a major participation of US non-compliant taxpayers in the program.
From the IRS perspective, starting the second half of 2014 and especially 2015, we also expect to see a large increase in criminal prosecutions and investigations of U.S. persons with undeclared financial accounts. This is because, through OVDP and the Program, the IRS will accumulate a massive amount of information allowing it to target non-compliant taxpayers with terrifying precision.
Contact Sherayzen Law Office For Help With Undeclared Foreign Accounts
If you are a U.S. taxpayer with undeclared foreign accounts, you should contact Sherayzen Law Office as soon as possible. Our firm consists of a team of highly intelligent and experienced tax professionals dedicated to helping U.S. taxpayers to bring themselves into compliance with U.S. tax law in a reasonable ethical manner. Not only will we be able to advise you on your voluntary disclosure options, but we will also be able to prepare all of the required tax forms and legal documents for you under the protection of the Attorney-Client Privilege.