Offshore Voluntary Disclosure Lawyers: Eligibility for Program for Swiss Banks

As offshore voluntary disclosure lawyers know very well, Switzerland continues to be the center of the unprecedented IRS and US Department of Justice enforcement of U.S. international tax laws, including FATCA. In a recent article, I described a new initiative, The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”), which is essentially a voluntary disclosure program for Swiss banks. In the Program, eligible banks can avoid US criminal prosecution in exchange for detailed disclosure of the accounts owned by U.S. taxpayers (as well as, in some cases, payment of monetary penalties).

The issue is: what banks in Switzerland are eligible to participate in the program? The issue is not only relevant to the banks themselves, but also for U.S. accountholders in Switzerland how have and have had foreign financial accounts in Switzerland during any time between January 1, 2008 and the present time. The chief reason is because these are accounts are most likely to be disclosed as early as the first quarter of 2014, thereby very likely preventing these U.S. taxpayers from entering into the OVDP program.

Swiss Banks Under Grand Jury Investigation Are Not Eligible

Swiss banks which are classified by the DOJ as Category 1 banks are not eligible to participate in the Program. Currently, there are at least fifteen banks which are included in this category. Most likely (thought not officially named by the DOJ) these banks are: Julius Baer Group AG, Credit Suisse, Rahn & Bodmer, Zuercher Kantonalbank, Basler Kantonalbank, Bank Hapoalim, Mizrahi-Tefahot Bank, Bank Leumi and others.

Types of Institutions Open to the Program

Many Offshore Voluntary Disclosure Lawyers pay close attention to the fact that the Program applies only custodial and depository financial institutions.

So, Swiss insurance companies, various fiduciaries, and many other investment companies cannot take advantage of the Program). It is not open to individuals; hence, asset managers, financial advisors and lawyers cannot participate in the program.

Impact on Offshore Voluntary Disclosure Program in the United States

If you are the taxpayer with an undisclosed financial account in a Swiss Bank that is eligible to participate in the Program, you need to consider your voluntary disclosure options immediately. As many offshore voluntary disclosure lawyers will tell you, if the IRS receives the information from a Swiss bank participating in the Program before you disclosure your account and initiates an investigation against you, it is very likely that you will not be accepted into the Offshore Voluntary Disclosure Program.

I expect that the letters sent out by the Swiss banks which intend to participate in the Program to their current and former U.S. customers will have a dramatic impact on the rising number of participants in the OVDP or OVDI. In fact, this trend can already be observed from the fact over 40,000 people have already participated in the IRS offshore voluntary disclosure programs.

Contact Sherayzen Law Office for Help with Your Undisclosed Swiss Bank Accounts

If you currently have undisclosed foreign accounts in Switzerland or you had such accounts at any point prior and after January 1, 2008, and closed these accounts, contact Sherayzen Law Office for help with your offshore voluntary disclosure options. Our experienced offshore voluntary disclosure tax firm 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.