The Swiss government has cleared the way for a dozen banks to turn over client data to the IRS despite an earlier ruling from Switzerland’s Federal Supreme Court. Even though the implementation date of FATCA has been pushed until next July, several Swiss banks are eager to turn over customer account records.
FATCA – short for the Foreign Account Tax Compliance Act – will soon require all foreign financial institutions to review their accounts and disclose any account holders with ties to the United States. Although last week the IRS pushed the implementation of certain FATCA key deadlines from January 1st to July 1st, 2014, several Swiss banks were already under a criminal investigation for allegedly helping wealthy Americans hide money from the IRS. After the U.S. Justice Department successfully prosecuted Switzerland’s oldest private bank, Wegelin, other banks worried that they might meet the same fate. (Wegelin closed its doors after pleading guilty to tax charges and paying a record fine.)
According to a story in Friday’s Wall Street Journal, Credit Suisse and Julius Baer, are weeks away from turning over data.
Many U.S. taxpayers have been sitting on the fence waiting to see what happens with FATCA. That could prove to be a very costly mistake, however. With or without FATCA, the IRS and Justice Department have become very adept at finding unreported offshore accounts. By targeting banks and individual bankers, the IRS is often able to leverage the threat of jail in return for cooperation and the release of customer records. The IRS also has several other tools in its arsenal.
Once your name is turned over to the government, its probably too late to take advantage of any of the amnesty programs. Customers with accounts at Israel based Bank Leumi learned that lesson the hard way. Because the IRS operates it’s amnesty programs on a “first contact” basis, its important to approach the IRS before they find you or before your name is turned over.
The tax lawyers at Mahany & Ertl help businesses and individual taxpayers with a wide variety of offshore reporting issues including FATCA, Reports of Foreign Bank and Financial Accounts (FBARs), the Offshore Voluntary Disclosure Program and traditional, voluntary disclosures. Have questions? Give us a call. All inquiries are protected by the attorney – client privilege and kept in strict confidence.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Minneapolis, Minnesota; Portland, Maine and San Francisco, California. IRS services available in all jurisdictions.
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Posted by Brian Mahany, Esq.
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