The IRS Expands its Reach, Adds Four New Banks to the FATCA Program

If you’ve seen The Wolf of Wall Street or read the financial news in the last few years, you are aware that foreign banks are no longer what they used to be. The times when it was illegal for Swiss banks to disclose information about their clients are long gone, and the same is true for hundreds of banks around the world.

With Switzerland preparing to publish the names of foreigners wanted for tax fraud on the Internet and the IRS cutting deals with international banks on a regular basis, the times of offshore tax-free money are becoming a thing of the past.

The 2010 Foreign Account Tax Compliance Act (FATCA) has been an efficient tool in getting foreign banks to come forward and provide details about American taxpayers who may have tax-evading accounts outside the US.

Since Switzerland´s oldest private bank Wegelin had to shut down after being prosecuted for helping tax evaders, banks have been forced to pay the IRS billions of dollars in fines, and many have decided to disclose information to the IRS.

As a result, more and more US taxpayers who are foreign account holders are coming forward and opting for one of the IRS´s offshore Amnesty Programs. Under the current legislation, these account holders may end up paying over 50% of their funds in the shape of Foreign Bank Account Report (FBAR) penalties or even go to jail for up to 10 years if their offshore financial institutions cut a deal with the IRS.

The list of banks trying to cut their losses by signing up for the IRS´s Amnesty Programs for financial institutions has been growing steadily since FATCA was started.

On May 28th, the US Department of Justice announced that four new banks had reached a resolution under the department’s Swiss Bank Program, which means, among other things, that they will be providing detailed information for each individual account in which U.S. taxpayers have a direct or indirect interest.

FATCA Compliant Banks

The new compliant banks are:

Société Générale Private Banking (Lugano-Svizzera)

MediBank AG

LBBW (Schweiz) AG

Scobag Privatbank AG

These banks add to the long list of compliant institutions which also includes:

1. UBS AG
2. Credit Suisse AG, Credit Suisse Fides, and Clariden Leu Ltd.
3. Wegelin & Co.
4. Liechtensteinische Landesbank AG
5. Zurcher Kantonalbank
6. swisspartners Investment Network AG, swisspartners Wealth Management AG, swisspartners Insurance Company SPC Ltd., and swisspartners Versicherung AG
7. CIBC FirstCaribbean International Bank Limited, its predecessors, subsidiaries, and affiliates
8. Stanford International Bank, Ltd., Stanford Group Company, and Stanford Trust Company, Ltd.
9. The Hong Kong and Shanghai Banking Corporation Limited in India (HSBC India)
10. The Bank of N.T. Butterfield & Son Limited (also known as Butterfield Bank and Bank of Butterfield), its predecessors, subsidiaries, and affiliates
11. Sovereign Management & Legal, Ltd., its predecessors, subsidiaries, and affiliates (effective 12/19/14)
12. Bank Leumi le-Israel B.M., The Bank Leumi le-Israel Trust Company Ltd, Bank Leumi (Luxembourg) S.A., Leumi Private Bank S.A., and Bank Leumi USA
13. BSI SA
14. Vadian Bank AG
15. Finter Bank Zurich AG

Individuals who have accounts at a bank which has decided to disclose information to the IRS are at risk of being prosecuted if they do not come forward voluntarily. The penalty for the Offshore Voluntary Disclosure Program has increased for the mentioned banks and is now 50% rather than 27.5%.

If you want to find out about the legal status of your foreign accounts or need help navigating the complex waters of the IRS´s compliance forms, FATCA regulations and FBAR reports, give us a call. All inquiries are kept strictly confidential and subject to the attorney – client privilege/

Having a great lawyer experienced with foreign account reporting is crucial in order to avoid legal trouble and minimize financial losses. We have helped numerous taxpayers across the United States and the world with foreign account reporting questions and amnesty filings.

For more information, contact attorney Bethany Canfield at or by telephone (414) 223-0464.

MahanyLaw – America’s FBAR and FATCA Lawyers