At least once a week we report on the latest Swiss bank or banks settling with the government. This week is no exception. According to the Justice Department’s Tax Division, Privatbank Bellerive AG and SB Saanen are the latest two Swiss banks to cooperate with the Department of Justice and IRS.
After Credit Suisse pleaded guilty and paid $2.6 billion in fines, other Swiss banks have been scrambling to cut deals and avoid criminal charges. All the banks are accused of assisting wealthy Americans evade taxes and avoid filing FBAR forms.
An FBAR is a Report of Foreign Bank and Financial Accounts. FBAR forms allow the IRS to know where taxpayers keep their money. Having $10,000 or more in foreign financial assets triggers the FBAR filing requirement. Owning the foreign account isn’t illegal but not telling Uncle Sam is.
SB Saanen and Privatbank Bellerive AG are not believed to have harbored many unreported accounts. It appears that many Swiss banks simply want to settle and avoid the expense and repercussions of a criminal prosecution.
In order to prosecute a bank, the government must prove more than mere knowledge that the bank harbored unreported accounts. Thus far, it appears that many of the banks that settled actively assisted taxpayers in hiding accounts and avoid FBARs. Some banks helped taxpayers move money from bank to bank in anticipation of IRS activity. Others helped their customers create sham shell companies in third party names.
The fines levied against SB Saanen and Bellerive are quite modest. The Justice Department says that Privatbank Bellerive AG will pay just $57,000.
The real implications aren’t the fines. As a condition of settlement, Swiss banks must agree to cooperate with the IRS. Americans with unfiled FBARs are running out of places to hide. Worse, once a bank agrees to cooperate or once a bank complies with FATCA and turns over a list of account holders, those with accounts at the bank are no longer eligible for some of the IRS’ amnesty and streamlined filing options.
While some wealthy Americans did try to hide money from Uncle Sam, many of our clients are dual nationals, green card holders, expats or foreign born Americans who simply didn’t understand the IRS foreign reporting and FBAR requirements.
Many of these folks now find themselves between a “rock and a hard place.” Time is truly running out if you wish to avoid all risk of criminal prosecution and the heaviest of penalties. Although few people have been prosecuted, the risk is real. Those especially at risk are those that moved their unreported accounts from one bank to another and those that used a shell company or nominee name on the account.
Our team of foreign reporting tax lawyers is one of the most experienced in the nation. We were asked by the CPAmerica organization of accounting firms to be their legal services provider for FATCA and FBAR issues.
If you have an unreported Swiss or other foreign account, call us. The initial consultation is free and confidential. Even if you do not hire us, the attorney – client privilege protects all inquiries, something that accounting firms and expat tax services can’t offer. Our IRS tax services are also available worldwide and often on a flat fee basis.
For more information, contact attorney Beth Canfield at or by telephone at (414) 223-0464.
Mahany & Ertl – America’s Tax & FBAR Lawyers