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OVDP Foreign Accounts Lawyers: Swiss Banks Disclosure Deadline on April 30, 2014

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As many OVDP Foreign Accounts Lawyers know, April 30, 2014 is a crucial deadline for the U.S. Department of Justice (“DOJ”) The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”). By this date, numerous Swiss banks will have to disclose the names of US accountholders, account balance information, and various other data with respect to U.S. accountholders.

OVDP Foreign Accounts Lawyers: What Banks Will Disclose U.S. Taxpayers by April 30, 2014

The list of Swiss Banks who will disclose their U.S. taxpayers to the IRS and DOJ by April 30, 2014 is very large and includes prominent banks such as:

Aargauische Kantonalbank
Acrevis Bank AG
AEK Bank 1826
Appenzeller Kantonalbank
Baloise Bank SoBa
Bank am Bellevue
Bank Coop AG
Banque Cantonale de Fribourg
Banque Cantonale de Genève
Banque cantonale du Jura
Banque cantonale du Valais
Banque Cantonale Neuchâteloise
Banque Cantonale Vaudois
Banque Privee Edmond de Rothschild
Basellandschaftliche Kantonalbank
Berner Kantonalbank
Cembra Money Bank AG
Cornèr Banca SA
Edmond de Rothschild Group
EFG International AG
Glarus Bank
Graubündner Kantonalbank
Hyposwiss Privatbank Zurich AG
Hyposwiss Private Bank Geneve SA
Hypothekarbank Lenzburg
Linth Bank
Lombard Odier & Cie.
Luzerner Kantonalbank
Migros Bank
Nidwaldner Kantonalbank
Piquet Galland & Cie SA
Post Finance
Raiffeisen
Rothschild Bank AG, Zurich
Saanen Bank
Schaffhauser Kantonalbank
Schwyzer Kantonalbank
St. Galler Kantonalbank
Ticino Cantonal Bank
Union Bancaire Privee
Valartis Bank (Switzerland)
Valiant Holding AG
Vontobel Holding AG
VP Bank (Switzerland)
Walliser Kantonalbank
Zuger Kantonalbank

Note: this is just a selective list – many other banks that are not named here are participating in the Program. This is particularly true for many private banks that are not required to disclose publicly whether they are participating in the Program.

OVDP Foreign Accounts Lawyers: Two Cantonal Banks and Other Category 1 Banks Excluded from the Program

The US Department of Justice (DOJ) previously launched investigations against two other Swiss cantonal banks, such as Baser Kantonalbank and Zürcher Kantonalbank. These banks are classified as Category 1 banks and will not be allowed to enroll in the Program. Similarly, otehr Category 1 banks cannot participate in the program Credit Suisse, Julius Baer, Pictet, HSBC Privatbank, Liechtensteinische Landesbank, Bank Leumi, Bank Hapoalim, Bank Mizrahi, Rahn & Bodmer, Bank Wegelin, Bank Frey, Neue Zürcher Bank.

OVDP Foreign Accounts Lawyers: Letters from Banks

As part of their “voluntary disclosure” under the Program, the Swiss Banks have already sent out letters to the majority of their U.S. account holders. These letters are not mere warnings (though, they also are exactly that to many unsuspecting U.S. taxpayers) to U.S. taxpayers with undisclosed Swiss accounts, but they are also a way for the Swiss Banks to minimize their penalty exposure (because, in calculating their own penalty base, Category 2 banks do not have to count the bank accounts which are already disclosed to the IRS).

OVDP Foreign Accounts Lawyers: What Does April 30, 2014 Mean for U.S. Taxpayers With Undisclosed Foreign Accounts

As most OVDP Foreign Accounts Lawyers indicate, April 30, 2014, marks a very important deadline for U.S. taxpayers with undisclosed foreign accounts in Switzerland. The reason is found in the Offshore Voluntary Disclosure Program (“OVDP”) acceptance rules.

The rules basically state that if the IRS receives the information about undisclosed foreign accounts from a third party before U.S. owner of these accounts enters the OVDP program, then the IRS will likely reject (or, as it was in the case with some OVDP participants last year – eject such U.S. owner from the OVDP) such U.S. owner’s application to participate in the OVDP program.

Therefore, OVDP Foreign Accounts Lawyers advise their clients that a very important and the most official route to voluntary disclosure will simply become completely closed to many U.S. taxpayers who fail to enter OVDP and disclose their Swiss accounts prior to April 30, 2014.

Of course, it is important to note, that it is possible that some of the Swiss banks have already disclosed such unreported accounts owned by U.S. taxpayers and many more are likely to do it in advance of the April 30, 2014, deadline.

In such case, U.S. taxpayers who either hold or previously held undisclosed bank accounts at any of the Swiss cantonal banks eligible for enrollment in the Program, or any bank already under investigation, may face substantial civil and potential criminal penalties if they do nothing or if their cases are not handled properly.

Therefore, it is imperative for U.S. taxpayers with undisclosed Swiss bank and financial accounts to contact OVDP Foreign Accounts Lawyers who specializes in the OVDP disclosure of foreign accounts.

Contact Sherayzen Law Office for Professional Help with Undisclosed Swiss Accounts

Experienced OVDP foreign accounts lawyer Eugene Sherayzen of Sherayzen Law Office, PLLC can help you with all of your voluntary disclosure issues. Our experienced tax law office will thoroughly review your case, estimate your existing tax and FBAR liability in the United States, identify the available voluntary disclosure options, prepare your voluntary disclosure package (including all legal documents and tax forms) and rigorously defend your interests during your negotiations with the IRS.

Contact Us Now to schedule a Confidential Consultation as soon as possible.

Canada FATCA: Canada Agrees to Implement FATCA

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On February 5, 2014, the U.S. Department of the Treasury announced that the United States signed an intergovernmental agreement (IGA) with Canada to implement the Foreign Account Tax Compliance Act (FATCA). Since Treasury last announced multiple IGA signings in mid-December 2013, agreements have also been signed with Italy and Mauritius, the latter of which also signed a new tax information exchange agreement.

Congress enacted FATCA in 2010 to target non-compliance by U.S. taxpayers using foreign accounts, and the provision has since become the global standard for promoting tax transparency. As of February 5, 2014, the United States had signed 22 IGAs and had 12 agreements in substance.  Canada FATCA Agreement is one of the most recent IGAs to be signed.

In general, FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of certain payments made to foreign financial institutions (FFIs) who do not agree to identify and report information on U.S. account holders. Governments have the option of permitting their FFIs to enter into agreements directly with the IRS to comply with FATCA under U.S. Treasury Regulations or to implement FATCA by entering into one of two alternative Model IGAs with the United States.

Canada FATCA: Model 1 IGA Signed by Canada

Canada FATCA implementation agreement is classified as Model 1 IGA. Under the Canada FATCA implementation agreement, FFIs will report the information required under FATCA about U.S. accounts to Canada Revenue Agency (“CRA”) , which in turn will report the information (as required by the Canada FATCA IGA) to the IRS.

Canada FATCA: US Taxpayers with Undisclosed Canadian Bank and Financial Accounts Are in Danger

What do these Canada FATCA developments mean for US taxpayers with undisclosed Canadian Bank and Financial Accounts? It means that all of these accounts are likely to be disclosed by the Canadian banks to the IRS, and these taxpayers have very little time to act.

If the IRS finds out about these undisclosed accounts, these U.S. taxpayers may face draconian willful civil and even criminal FBAR penalties.

This means that the owners of undisclosed Canadian accounts should consult an international tax expert in undisclosed foreign accounts as soon as possible.

Contact Sherayzen Law Office for Professional Help with the Voluntary Disclosure of Your Canadian Bank and Financial Accounts

If you have undisclosed financial accounts in Canada, contact Sherayzen Law Office as soon as possible to schedule a consultation. Our law firm has experienced expertise in voluntary disclosure of undisclosed foreign accounts and foreign assets. We have helped U.S. taxpayers around the world to bring themselves back into US tax compliance, while minimizing their tax and FBAR penalty exposure. Call or email us NOW!

OVDP International Tax Lawyer: Swiss Cantonal Banks Enter US Program for Banks

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As an OVDP International Tax Lawyer, I continue to point out the centrality of the current U.S. Department of Justice (“DOJ”) The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”) to the global international tax compliance efforts of the United States. As previous explained, the Program basically operates as a voluntary disclosure program for Swiss banks, similar to the US Internal Revenue Service’s Offshore Voluntary Disclosure Program (“OVDP”) for U.S. taxpayers holding undisclosed offshore accounts. The DOJ promises that, in return for providing disclosure of the accounts held by U.S. taxpayers and, in some case, paying various penalties, the qualifying Swiss banks can avoid U.S. criminal prosecution.

Cantonal Swiss Banks deserve a special attention from U.S. taxpayers precisely because they tend to be smaller, more involved in local life and (prior to the Program) would have been least likely to be concerned with the U.S. tax compliance. Yet, as it is explained below, these Swiss banks are actively participating in the Program. U.S taxpayers with undisclosed accounts in Switzerland are now faced with an even more immediate impact on their U.S. tax compliance. It is very important that they seek advice from an experienced OVDP International Tax Lawyer found at Sherayzen Law Office.

OVDP International Tax Lawyer: Switzerland Cantonal Banks Enter the Program

According to recent news reports, half of Switzerland’s publicly-backed cantonal banks (which are either majority or entirely-owned by the Swiss cantons) have announced they will join the Program. In general, many of these banks are protected by a full state guarantee (each respective canton has a subsidiary responsibility its bank’s liabilities). Switzerland has twenty-four cantonal banks in total, serving Switzerland’s twenty-six cantons. As of the end of 2013, the following cantonal banks have stated they will enter the Program:

Aargau (Aargauische Kantonalbank) (AKB)
Appenzell (Appenzeller Kantonalbank) (APPKB)
Geneva (Banque Cantonale de Geneve (BCGE)
Glarus (Glarner Kantonalbank) (GLKB)
Graubünden (Graubundner Kantonalbank) (GKB)
Lucerne (Luzerner Kantonalbank) (LUKB)
Nidwalden (Nidwaldner Kantonabank) (NWKB)
Obwalden (Obwaldner Kantonalbank (OWKB)
Schwyz (Schwyzer Kantonalbank) (SZKB)
St. Gallen (St. Galler Kantonalbank) (SGKB), along with its subsidiaries Hyposwiss Privatbank Zurich AG and Hyposwiss Private Bank Geneve SA)
Vaud (Banque Cantonale Vaudoise (BCV), along with its subsidiary Piquet Galland & Cie SA)
Zug (Zuger Kantonalbank) (ZugerKB)

At least eight of twelve cantonal banks have opted to apply under “Category 2” for Swiss banks likely to accounts held by US persons (see here for more information about this category), which could result in substantial fines, but absolve bank officials from criminal liabilities. Zuger Kantonalbank, for example, stated that it would apply under this category even though it claimed it did not actively seek US customers.

As of the end of 2013, four cantonal banks stated that will enroll in the Program under Category 4 for essentially local Swiss banks that are unlikely to have assets consisting of undeclared U.S.-taxpayer accounts. Swiss banks applying under Category 3 or 4 have a limited time available between July-October, 2014 in which to notify the US as to whether they will enter the Program.

OVDP International Tax Lawyer: Two Cantonal Banks Excluded from the Program

The US Department of Justice (DOJ) previously launched investigations against two other Swiss cantonal banks, such as Basler Kantonalbank (Basel) and Zürcher Kantonalbank (Zurich). These banks are classified as Category 1 banks and will not be allowed to enroll in the Program.

Contact Sherayzen Law Office for Legal Help with Undisclosed Swiss Accounts

U.S. taxpayers who either hold or previously held undisclosed bank accounts at any of the Swiss cantonal banks eligible for enrollment in the Program, or any bank already under investigation, are advised to seek competent and experienced legal assistance. U.S. taxpayers will likely face substantial civil and potential criminal penalties if they continue to hold undisclosed accounts or if their cases are not handled properly. At Sherayzen Law Office, PLLC, we can help with your all of your voluntary disclosure issues.

Valiant Holding AG Enters DOJ Program for Banks; Others will Follow

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With the Swiss Financial Market Supervisory Authority (“FINMA”) deadline ending today on December 9, 2013, Valiant Holding AG made it official – it is the first bank to officially announce its intention to enter the The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”). While the first one to do it, Valiant Holding AG will definitely not be the only bank to do it. As Sherayzen Law Office predicted earlier, there will be an avalanche of Swiss Banks following in the footsteps of Valiant Holding AG.

Background

On August 29, 2013, the U.S. Department of Justice (“DOJ”) and the government of Switzerland issued a joint statement instituting The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”). Sherayzen Law Office, PLLC has covered the specific details of the Program in a previous article. Essentially, the Program functions as a voluntary disclosure program for Swiss banks, similar to the US Internal Revenue Service’s Offshore Voluntary Disclosure Program (“OVDP”) for U.S. taxpayers holding undisclosed offshore accounts. In general, in return for providing extensive disclosure of the accounts held by U.S. taxpayers, banks that qualify for the Program can avoid U.S. criminal prosecution.

As also explained earlier, the Program is only open to non-“Category 1” banks (fourteen Category 1 Swiss banks are already under criminal investigations by the DOJ, including Credit Suisse, Rahn & Bodmer, Zuercher Kantonalbank, Basler Kantonalbank, and Bank Leumi, among others). As I explained earlier in another article, under the Program, “Category 2” banks will face potentially substantial penalties.

There is actually fear that the costs of compliance combined with penalties will simply overwhelm a large portion of small Swiss banks, with some predicting the loss of at least one-quarter of the Swiss banks who enter the Program. It is not known whether Valiant Holding AG has sufficient resources to sustain the effort required to participate in the Program, though no one really raised this issue yet.

FINMA Deadline of December 9, 2013

According to Swiss regulatory officials, Swiss banks had it until today (December 9th) to notify the FINMA whether they intend to participate in the Program. This is why Valiant Holding AG announced its participation today.

FINMA Encourages Swiss Banks to Participate in the Program

Recently, various members of the FINMA, such as their CEO, Dr. Patrick Raaflaub, have issued statements and press releases encouraging various Swiss banks to enter the Program. (FINMA is responsible for implementing the Financial Market Supervision Act and financial market legislation, and according to their website, “As an independent supervisory authority, FINMA acts to protect the interests of creditors, investors and insured persons and to ensure the proper functioning of the financial markets.”) For example, in a recent edition of the Swiss Neue Zürcher Zeitung newspaper, Raaflaub emphasized the strong possibility that Swiss banks that chose not to enter the Program would likely face years of costly legal risks and even more coercive enforcement measures by the DOJ in the future. Further, although participation in the Program is onerous, he noted that it would provide participating Swiss banks with long-needed legal certainty.

Adding to the pressure that Swiss banks face is the fact that Raoul Weil, former UBS Chairman and chief executive officer of Global Wealth Management & Business Banking, was arrested in October while on holiday at a luxury hotel in Italy. Weil agreed to extradition to the US for trial for allegedly assisting U.S. persons in hiding $20 billion from the IRS.

The various public statements by FINMA, however, have understandably caused consternation among Swiss bankers. There is a sentiment in Switzerland that FINMA is not doing enough to protect Swiss interest and to counter the U.S. DOJ’s tactics.

Many Swiss Banks Likely to Enter the Program Following Valiant Holding AG

Despite the anti-US rhetoric, however, it appears that numerous non-Category 1 Swiss banks will follow the example set by Valiant Holding AG and will likely enter the Program today. According to recent US news reports, most of Switzerland’s approximately 300 or so smaller banks are expected to enter the Program (FINMA has not disclosed yet as to how many have done so). Therefore, Valiant Holding AG announcement, while somewhat historic, is not actually surprising.

A spokesman for Berner Kantonalbank noted that, “Participating in the program is absolutely an issue for us” and that the board would take a final vote on the matter; a spokeswoman for south Switzerland’s Corner Bank also stated that the bank was considering entering the Program. Other banks, such as Vontobel, EFG International, Banque Cantonale Vaudoise, St. Galler Kantonalbank, and Linth Bank, either have not made a decision yet, or did not issue public comments as of last week.

U.S. Taxpayers With Undisclosed Accounts In Valiant Holding AG and Other Swiss Banks Must Act Quickly

The Program presents a tremendous risk to U.S. taxpayers with undisclosed financial accounts in Valiant Holding AG and other Swiss Banks. Not only are their accounts likely to be disclosed to the IRS, but it will be done in a very short period of time.

As noted earlier, the due date for these banks is today; within a short period of time, Valiant Holding AG and other Swiss Banks will likely proceed with their disclosures to the DOJ and the IRS. In these case, U.S. taxpayers will likely face substantial civil and potential criminal penalties if they continue to hold undisclosed accounts or if their cases are not handled properly.

Therefore, U.S. taxpayers who either hold or previously held undisclosed bank accounts in Valiant Holding AG or any of the Swiss banks eligible for the Program should seek competent and experienced legal assistance as soon as possible to avoid potentially disastrous consequences.

Contact Sherayzen Law Office for Experienced, Professional Legal Help With Your Offshore Voluntary Disclosure

The experienced offshore voluntary disclosure attorneys at Sherayzen Law Office, PLLC can help with your all of your voluntary disclosure issues. We are a team of highly experienced team of international tax professionals who are dedicated to helping our clients. Our ethical creative balanced solutions have helped people throughout the world to properly disclose their foreign financial accounts to the IRS while avoiding the numerous voluntary disclosure pitfalls.

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Offshore Voluntary Disclosure of Swiss Accounts and the Program for Banks

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Since September, an increasing number of my clients come to me with respect to the offshore voluntary disclosure of Swiss accounts. No doubt that the increase in the offshore voluntary disclosure of Swiss accounts comes from The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”) initiated by the U.S. Department of Justice (“DOJ”) on August 29, 2013. In this article, I will try to trace the precise influence of the Program on the offshore voluntary disclosure of Swiss accounts.

The Program

At the end of August of 2013, the DOJ, in cooperation with the Swiss government, instituted the Program. What is the Program? I describe it in detail in this article; for the purpose of the present writing, it is sufficient to state that the Program is essentially a voluntary disclosure program for Swiss Banks, not that dissimilar from the OVDP (the Offshore Voluntary Disclosure Program) now closed.

Essentially, in return for turning over very detailed information about their cross-border operations and U.S. accountholders with accounts over $50,000 (going back to August 1, 2008), the banks receive either a Non-Prosecution Letter or a Non-Target Letter which basically promises that the U.S. government is not going to criminally prosecute or target the participating banks. As in the OVDP, the Program excludes banks currently under the DOJ investigation from participating in the Program. Another similar with the OVDP feature – category 2 banks will pay a hefty penalty.

The Program Increases Pressure on the U.S. Taxpayers to Disclose

U.S. taxpayers with undisclosed bank accounts in Switzerland cannot personally participate in the Program. Nevertheless, the Program has a tremendously deep impact on these taxpayers.

First, under the Program, the Swiss banks should send out letters to all U.S. taxpayers with undisclosed accounts urging them to do the offshore voluntary disclosure of Swiss accounts. The Swiss banks are not only required to do so, but may actually benefit if the U.S. taxpayers enter the OVDP (due to potential penalty reductions).

Second, the participating Swiss banks should turn over very detailed information with respect to U.S. taxpayers and their Swiss accounts. Hence, there is a tremendously high risk of exposure for all U.S. taxpayers with undisclosed Swiss accounts. Moreover, if the IRS receives the information from the Swiss banks about a U.S. taxpayer’s accounts before such taxpayer enters the OVDP, then the IRS is likely to disqualify such U.S. taxpayer from participating in the OVDP.

Finally, because the participating Swiss banks should further disclose various information related to how they obtained business from U.S. taxpayers in the past, it is likely that the IRS will be able to identify the non-compliant accounts indirectly (i.e. even if a taxpayer is not directly identified by the participating Swiss Bank). This means that U.S. taxpayers who indirectly own undisclosed accounts in Switzerland are also at high risk of detection, investigation and, ultimately, criminal prosecution.

Offshore Voluntary Disclosure of Swiss Accounts

As the number of options narrow for U.S. taxpayers, they should seriously consider doing an offshore voluntary disclosure of Swiss accounts.

Be careful, however, not to fall into the trap of thinking that OVDP is the only way to disclosure your Swiss accounts. The exact route of Offshore Voluntary Disclosure of Swiss accounts is likely to depend on the individual circumstances of your case and other venues may be open to you, even though they are not described in the letter that you may have received from a Swiss bank. You should consult an experienced international tax attorney in this matter.

Contact Sherayzen Law Office for Professional Guidance on the Offshore Voluntary Disclosure of Swiss Accounts

If you are thinking about conducting an Offshore Voluntary Disclosure of Swiss Accounts, contact Sherayzen Law Office for professional help. Our law firm specializes in helping people like you!