Germany Steal Bank Info, Bank Pays Fine – What it Means for US Taxpayers
The IRS may be unpopular with most Americans but it doesn’t conduct its business by purchasing stolen information. We may pay disgruntled employees, jilted spouses and poor accountants a “reward” for the information but we don’t pay bank employees to steal it. Germany does, however, and Germany exchanges information with the U.S.
In a high profile case last year, German tax officials purchased account data stolen from Swiss private bank group Julius Bar. Now the bank has agreed to pay Germany $72 million (US) to settle charges that it helped wealthy Germans evade taxes.
The problem for U.S. taxpayers is that Germany and the U.S. exchange tax information. While there is no evidence that the U.S. assisted Germany in the purchase of the stolen information, it’s a good bet that the US has seen the list of names from Germany. This isn’t the first time that Germany has purchased stolen information.
In 2009, Germany reportedly paid $7 million (US) to Heinrich Kieber, a banker with LGT bank in Liechtenstein, for information on LGT’s customers. Because stealing customer data is illegal, Germany apparently also provided Kieber with a new identity.
In this economy, tax authorities will use whatever means necessary to learn the identities of people with unreported offshore accounts. Even if the U.S. will not directly engage in bribery or theft to get the information, it will still accept that information from other governments. And our whistleblower program makes it much more likely that he source of the information will be someone you know.
The time has come to revisit the foreign accounts and come into compliance. The accounts need not be closed, just reported. There is a last chance amnesty program that runs until August of this year. Participants get a walk on criminal prosecution and reduce their penalties by half. Time is running out, however. All paperwork, payments and records must be complete and submitted by August 31st.
Mahany & Ertl is a boutique law firm concentrating in tax resolution and fraud recovery. With offices in Milwaukee, Detroit and Portland, we help taxpayers anywhere within the U.S. and beyond. All calls are kept in strict confidence. Brian Mahany can be reached directly at (414) 704-6731 or at