by Brian Mahany
The German and Swiss governments have agreed to a deal regarding hidden Swiss bank accounts. Although the press in the U.S. has focused on Americans with hidden Swiss accounts, much of the drama has been in Europe. The accord between Germany and Switzerland has worldwide implications including the United States.
As the European (and much of the world’s) economy worsens, many cash-strapped governments are ramping up efforts to find and tax hidden offshore accounts. Unlike many countries, the IRS considers it a felony to have an unreported foreign bank or brokerage account. American taxpayers must disclose their foreign financial holdings yearly on a Report of Foreign Bank and Financial Account or FBAR for short. Profits from foreign accounts must also be declared on one’s income tax return.
Germany has been the bully of the tax collection world in recent years. German tax authorities routinely prosecute Swiss bank employees who they say helped Germans evade taxes or they simply pay someone to steal account holder information.
In return for moderation by the Germans, the Swiss will help turn over information about specific customers without simply handing over lists of all account holders. That is important for taxpayers in other countries as Germany frequently shares tax information with other western governments.
While the promise of moderation might be of a limited benefit to Americans with hidden accounts – part of the agreement is that Germany will stop stealing information – it also signals a further erosion of Swiss bank secrecy.
Although UBS and Credit Suisse reportedly welcomed the deal in their public statements, the real truth is that Switzerland is beginning to cave to pressure from both the U.S. and Europe. What will prevent even more disclosures a few months?
The fabled Swiss bank secrecy is nothing like it once was. While the Swiss politicians and bankers may say that it still exists, these agreements with foreign tax authorities suggest otherwise.
If you have an unreported offshore bank account, give us a call. Even if you call too late to qualify for the IRS’ tax amnesty program, called the Offshore Voluntary Compliance Initiative or OVDI, we can still help.
Our tax attorneys have helped taxpayers from Maine to Hawaii and even overseas. All calls are confidential; for more information contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at firstname.lastname@example.org
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