by Brian Mahany
Anyone who has followed this blog should not be surprised that foreign bankers are beginning to open up and disclose the names of their U.S. account holders. Although the IRS’ offshore tax amnesty program is over, federal prosecutors and IRS agents are just getting warmed up to begin chasing the hold outs – hold outs that are estimated to number in the 100,000’s.
While many taxpayers are evidently not worried about getting caught – or are still unaware of the reporting requirements – recent indictments of seven Credit Suisse bankers and two from Julius Baer have rocked the banking world.
Turning over bank account information is still a violation of the Swiss bank secrecy laws but the recent criminal probes have everyone nervous. The Swiss government is purportedly ready to ratify an exchange protocol. A vote come from the Foreign Affairs Committee of the Swiss parliament as early as November 10th.
According to published reports, the banks that may soon start disclosing the names of U.S. taxpayers holding foreign accounts include Credit Suisse, HSBC, Basler Kantonalbank, Wegelin & Co., Zuercher Kantonalbank, Julius Baer. Other banks under investigation that may also cooperate include three Israeli banks – Bank Leumi, Bank Hapoalim and Mizrahi-Tefahot Bank, a Liechtenstein bank, Liechtensteinische Landesbank AG and asset manager, NZB AG.
So far the IRS and the U.S. Department of Justice have prosecuted 21 foreign bank officials and attorneys.
What does this mean for U.S. taxpayers? If you still haven’t reported your foreign bank and brokerage accounts on a Report of Foreign Bank and Financial Accounts (“FBAR”), do so immediately. Consider hiring a lawyer to help you. The penalties for not reporting foreign accounts includes a penalty of 50% of the highest balance in the account for each year the account was not reported. It’s also a felony punishable by 5 years prison in many instances. If you have unreported foreign income, the penalties could be even higher.
Many dual nationals and Americans living abroad simply don’t know of their reporting obligations. Others have been playing audit roulette for years hoping not to get caught. Both groups are headed for trouble!
If you have an unreported foreign account or income, call us immediately. The call is completely confidential. We have helped people around the world with voluntary disclosures, tax compliance and FBAR reporting. For more information, contact attorney Brian Mahany at (414) 704-6731 or by email at
Mahany & Ertl, LLC – America’s tax lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & San Francisco. Services available in most locations.