Liechtensteinische Landesbank is Liechtenstein’s national bank. It is also reputed to hold thousands of unreported bank accounts for US taxpayers. Although Liechtenstein’s neighbor Switzerland has much more visibility as a “tax haven,” Liechtenstein remains very popular for those wishing financial secrecy. That is all changing.
Liechtensteinische Landesbank (LLB Vaduz for short) becomes the third major bank to settle with the U.S. Department of Justice over allegations that the bank helped wealthy Americans hide money from Uncle Sam. (UBS and Wegelin are the first two banks.)
What makes this case unusual is that Liechtensteinische Landesbank is 57% owned by the government. By threatening to prosecute a national bank owned mostly owned by a foreign country, the IRS and DOJ are sending a strong and clear message: The United States will prosecute anyone they believes helps Americans commit tax evasion.
Under the terms of the settlement, LLB will pay approximately $24 million in fines. More importantly, we expect that the bank will disclose all of the names – past and present – of account holders with ties to the United States. In recent months, we have seen several cases in which taxpayers thought they could outsmart the IRS by closing Swiss accounts and moving money to Liechtenstein.
It’s not just taxpayers with accounts at Liechtensteinische Landesbank that should be concerned. Several Swiss and Israeli banks have branches in the country. Also, account holders at other popular Liechtenstein banks such as Bank Alpinum, Bank Frick, LGT Bank and Raiffeisen Bank should also be worried as banks there will probably all succumb to the same pressures.
Beginning next year, all foreign banks will be required to review their accounts and report those with ties to the United States. Although not every country will cooperate, Justice Department officials are proving quite adept at finding those with unreported accounts and punishing banks that assist them.
Owning an account in an offshore bank is completely legal if properly reported. U.S. taxpayers (including expats, dual nationals and green card holders) must disclose their foreign holdings if the aggregate value exceeds $10,000. Reporting is done on a Report of Foreign Bank and Financial Accounts (FBAR). Failure to file an FBAR is a crime and carries huge civil penalties.
If you have or had an unreported account at Liechtensteinische Landesbank contact us immediately. Our IRS tax attorneys can help you come into compliance and avoid prosecution. We can also help you reduce your penalties.
Time is running out if you are not in compliance. Simply repatriating the money or closing your Swiss or other foreeign account doesn’t get you off the hook either. For more information, contact attorney Brian Mahany at or by telephone at (414) 223-0464.
We will gladly explain your responsibilities and explore your options. (Your initial consultation with a skilled FBAR attorney is free and without obligation.) Our tax lawyers have helped many taxpayers with a wide variety of foreign reporting problems including FATCA, the Offshore Voluntary Disclosure tax amnesty program and unfiled FBARs. In many cases it is possible to avoid all or most penalties. All inquiries protected by the attorney client privilege and kept in strict confidence.
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.
Need more information about unreported foreign accounts? Our Due Diligence blog has a search engine located in the upper right hand corner. Our website also has an article titled FBAR 101 – Critical Information for FBAR Filers which may answer many of your questions.
Post by Brian Mahany, Esq.