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Voluntary Disclosure News: IRS Offers a Deal to 11 Swiss Banks

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According to Reuters and Sonntags Zeitung, U.S. officials are offering eleven Swiss banks (including Credit Suisse, Julius Baer, Basler Kantonalbank and HSBC Switzerland) a deal that allows them to avoid criminal prosecution in exchange for revealing details of their U.S. offshore business to the U.S. government.

Allegedly, in exchange to dropping the criminal prosecution, the banks would have to pay a hefty fine and agree to assist IRS in tax evasion cases. This means that the Swiss banks will have to deliver all information on their U.S. offshore business (via Bern) to the United States.

Allegedly, as part of an agreement, the banks would hand over to the IRS: the correspondence between a bank and its U.S. clients (including notes from telephone conversations and meetings), internal notes about U.S. client business from all relevant business units, correspondence between the banks and third parties (such as wealth managers) concerning U.S. persons, U.S. funds that were transferred to third parties, and documents about the U.S. business model. The banks would also have to supply the names of the bankers who conducted offshore business, though criminal cases against individuals would not be pursued.

An interesting point in this agreement is that, purportedly, the IRS agreed that the names of the U.S. clients would be blacked out.

While the Swiss banks used to have an iron-clad reputation for protecting their account holders’ identities, it is no longer the case. Since the UBS deal in 2009 (when the Swiss parliament approved a deal forcing USB to reveal details of about 4,450 U.S. citizens), the IRS set an important precedent. Whatever the outcome of the negotiations, it is likely that further damage will be done to the Swiss bank secrecy laws.

Finally, it is important to point out that the information about this deal is still murky and simply based on a source of a Swiss newspaper. The exact details (if the deal is actually agreed to) will likely come out early next year.

Contact Sherayzen Law Office for Voluntary Disclosure of Swiss Bank and Financial Accounts

It is very important for U.S. taxpayers to engage in voluntary disclosure of their unreported foreign bank and financial accounts in order to reduce their civil and criminal penalties. The combination of the deal with Swiss banks and the new Form 8938 makes it extremely dangerous for U.S. persons to continue to delay the disclosure of their foreign assets (where required to do so by law).

If you have foreign bank and financial accounts, whether in Switzerland or elsewhere outside of the United States, contact Sherayzen Law Office NOW to explore your voluntary disclosure options. Our experienced voluntary disclosure firm will help you choose the right disclosure for you, draft and prepare all of the necessary documentation, guide you through the complex regulations of voluntary disclosure, and provide zealous ethical advocacy of your interests while negotiating with the IRS.

OVDI: IRS Shows Continued Progress on International Tax Non-Compliance

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The Internal Revenue Service has achieved significant success in combating international tax non-compliance. The total number of voluntary disclosures up to 30,000 since 2009. In all, 12,000 new applications came in from the 2011 offshore program that closed last week.

The IRS also announced today it has collected $2.2 billion so far from people who participated in the 2009 program, reflecting closures of about 80 percent of the cases from the initial offshore program. On top of that, the IRS has collected an additional $500 million in taxes and interest as down payments for the 2011 program — a figure that will increase because it doesn’t yet include penalties.

IRS Increases Pressure on U.S. Taxpayers

“By any measure, we are in the middle of an unprecedented period for our global international tax enforcement efforts,” said IRS Commissioner Doug Shulman. “We have pierced international bank secrecy laws, and we are making a serious dent in offshore tax evasion.”

Global tax enforcement is a top priority at the IRS, and Shulman noted progress on multiple fronts, including ground-breaking international tax agreements and increased cooperation with other governments. In addition, the IRS and Justice Department have increased efforts involving criminal investigation of international tax evasion.

The combination of efforts helped support the 2011 Offshore Voluntary Disclosure Initiative (OVDI), which ended on September 9. The 2011 effort followed the strong response to the 2009 Offshore Voluntary Disclosure Program (OVDP) that ended on Oct. 15, 2009.

Number of Disclosures

The 2009 program led to about 15,000 voluntary disclosures and another 3,000 applicants who came in after the deadline, but were allowed to participate in the 2011 initiative. Beyond that, the 2011 program has generated an additional 12,000 voluntary disclosures, with some additional applications still being counted. All together from these efforts, taxpayers came forward and made 30,000 voluntary disclosures.

“My goal all along was to get people back into the U.S. tax system,” Shulman said. “Not only are we bringing people back into the U.S. tax system, we are bringing revenue into the U.S. Treasury and turning the tide against offshore tax evasion.”

In new figures announced today from the 2009 offshore program, the IRS has $2.2 billion in hand from taxes, interest and penalties representing about 80 percent of the 2009 cases that have closed. These cases come from every corner of the world, with bank accounts covering 140 countries.

The IRS is starting to work through the 2011 applications. The $500 million in payments so far from the 2011 program brings the total collected through the offshore programs to $2.7 billion.

Criminal prosecutions

People hiding assets offshore have received jail sentences running for months or years, and they have been ordered to pay hundreds of thousands and even millions of dollars. UBS. UBS AG, Switzerland’s largest bank, agreed in 2009 to pay $780 million in fines, penalties, interest and restitution as part of a deferred prosecution agreement with the U.S. government. The two disclosure programs provided the IRS with a wealth of information on various banks and advisors assisting people with offshore tax evasion, and the IRS will use this information to continue its international enforcement efforts.

Contact Sherayzen Law Office to Resolve Your International Tax Issues

If you have not filed your FBARs and/or have unreported foreign-source income, please contact Sherayzen Law Office NOW! Our experienced international tax firm will help you resolve your international tax compliance issue and guide you through the complex process of the IRS voluntary disclosure.