3 More Swiss Banks Agree to Turn Over Names of US Account Holders
At the last minute, 3 more Swiss banks have agreed to cooperate with U.S. Treasury and Justice Department officials in the hopes of avoiding prosecution in the United States. The U.S. government had given an ultimatum to Swiss banks that wish to avoid further scrutiny. The 3 banks that are reportedly cooperating are Valiant Holding AG, Berner Kantonalbank AG and Vontobel Holding AG
Justice Department officials have been asking Swiss banks to cooperate in a program that targets banks suspected of having American taxpayers with unreported foreign accounts. Federal law requires U.S. taxpayers to report foreign financial holdings if the aggregate value exceeds $10,000. The law includes foreign born Americans, green card holders and dual nationals.
Reporting of foreign accounts is done on one’s income tax return and on a Report of Foreign Bank and Financial Accounts (FBAR form). Willful failure to file an FBAR is a felony and carries huge civil penalties.
Compliance with the law has been poor. While some taxpayers deliberately try to hide money from Uncle Sam (tax evasion), most violators simply don’t understand that they are required to report offshore accounts. To bolster compliance, the IRS and Justice Department have been targeting foreign financial institutions including Swiss banks. Several banks such as UBS and Wegelin have already faced criminal prosecution. Recently officials offered Swiss banks a method of disclosing that avoids criminal prosecution.
There are hundreds of Swiss banks potentially impacted by the Justice Department’s aggressive enforcement policies. Banks have until December 31st to participate or face further action. With Valiant Holding AG, Berner Kantonalbank AG and Vontobel Holding AG agreeing to cooperate, the total number of Swiss banks agreeing to nonprosecution agreements is five. Participation in the program means disclosing the names of their American account holders.
What does this mean if you have an unreported Swiss account and unfiled FBARs? Plenty!
Time is running out to disclose unreported offshore accounts. There are amnesty and voluntary disclosure options available but many of those programs only offer eligibility if you come forward first. The amnesty options are not available if the IRS gets your name from a foreign bank.
This post offers general information. The offshore reporting rules are very complex. We strongly recommend that you find an experienced FBAR lawyer to help you navigate these dangerous waters.
If you wish a free consultation to discuss your options, give us a call. All inquiries are protected by the attorney-client privilege and kept in strict confidence.
About the author. Brian Mahany is a tax attorney / FBAR lawyer specializing in foreign reporting for individuals and corporations. He is admitted to the United States Tax Court and writes for TaxConnections as well as his own blog, Due Diligence. He can be contacted at or by telephone at (414) 704-6731 (direct). Most services can be handled for a flat fee.