by Brian Mahany
According to a wire story from Reuters, the Swiss government is considering a global settlement on behalf of hundreds of Swiss banks. Although the details of the settlement discussions were not revealed, U.S. Justice Department officials and the IRS are not likely to agree on any settlement absent full disclosures of Americans with Swiss accounts. Why? The feds are trying to identify taxpayers who have failed to file FBARs – Report of Foreign Bank and Financial Accounts.
Beginning in June 2008, criminal investigation of Swiss banking giant, UBS Bank, the Justice Department has aimed much of its offshore prosecution efforts at Swiss banks. The IRS and DOJ believe that many Swiss banks actively helped American taxpayers evade taxes.
Opening a Swiss account is completely legal (as long as the account is reported). Holders of foreign accounts must file yearly FBARs if their total offshore holdings exceed $10,000.
Many taxpayers are still unaware of the requirement to report foreign accounts and file FBARs. There are tens of millions of dual nationals, foreign born Americans and resident aliens (green card holders), that simply don’t understand the FBAR regulations. Usually these folks have accounts in their native countries while others, however, made a conscious decision to open an account in an offshore entity.
Whatever the reason, the penalties for not filing an FBAR are huge. Willful violations are subject to penalties of up to $100,000 per year per account and a 5 year prison term. Even non-willful violations carry hefty penalties.
According to the Reuters story, banks already under investigation may enter into deferred prosecution agreements. All 300 Swiss banks, however, are seeking a global settlement. Banks believed to already be under investigation include Clariden Leu, Basler Kantonbank, Credit Suisse and Julius Baer.
The oldest private Swiss bank, Wegelin, closed its doors after pleading guilty earlier this year to U.S. criminal charges related to unreported Swiss accounts. Over a dozen Swiss bankers have also been prosecuted. Those prosecutions and the current investigations are fueling the desire of the Swiss to find a global resolution and end the prosecutions.
The tax lawyers at Mahany & Ertl have helped many taxpayers with a wide variety of offshore reporting problems. From unfiled FBARs to the new FATCA legislation to the current offshore account amnesty program, we can help. Our firm is the exclusive legal services provider to the CPAmerica organization for foreign reporting issues meaning we are the lawyers that other professionals turn to with questions.
For more information, contact attorney Bethany Kroes at or by telephone at (414) 223-0464. All inquiries are protected by the attorney – client privilege and kept in strict confidence. Whether you hire or us or not, we will gladly discuss your options at no cost and without obligation.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. IRS tax services available worldwide.
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