Four Banks Reach Resolution Under the Swiss Bank Program
On August 29, 2013, the Swiss Bank Program was announced. The program was aimed to entice banks to provide information on U.S. citizens and people connected to the U.S. who had funds kept offshore and were not fulfilling requirements to report their offshore accounts annually. The deadline for banks to come forward and alert the Department of Justice that they wanted to participate was December 31, 2013. Banks were encouraged to come forward and tell the DOJ by this date if they believed they had broken the law by helping U.S.-related accountholders evade tax obligations.
The reverberations of the Swiss Bank Program are still being felt today, as more and more banks enter into resolutions with the Department of Justice. Accountholders with money at any of the many participating foreign banks could find themselves being investigated for undeclared offshore funds and could end up facing very serious financial penalties.
It is better for accountholders to take action before they come under investigation, so if you have undeclared funds and are worried your bank will turn your information over -- or has turned your information over -- you should speak with a Washington DC tax evasion attorney immediately.
FOUR MORE BANKS MAKE AGREEMENTS WITH DOJ
In October, the Department of Justice announced that four additional banks had reached resolution agreements under the Swiss Bank Program. These banks included Luzerner Kantonalbank AG (Luzerner), Habib Bank AG Zurich (HBZ), Banque Heritage S.A. and Hyposwiss Private Bank Genève S.A. (Hyposwiss Geneva). The banks engaged in many behaviors considered to be traditional Swiss banking services that were designed to help facilitate tax evasion, including holding mail, opening numbered accounts, holding accounts in the name of corporate entities or insurance carriers, and transferring funds to aid in evasion of income tax.
The total fines that will be collected from these four banks exceed $25 million. For customers of these offshore financial institutions, the resolution also comes at great cost. As part of entering and participating in the Swiss Bank Program to avoid criminal prosecution, the banks must agree to cooperate in full with U.S. taxing authorities and must agree to implement controls to help stop tax evasion.
The banks must also provide account information -- including identifying details and balances -- on accountholders who are connected to the United States. This means that customers of these four banks who were expecting privacy will now find that their foreign financial institution has turned over enough identifying details to the IRS and the DOJ that an investigation can be launched. If criminal or civil proceedings do arise as a result of the information the banks turned over, the banks must also cooperate with civil and criminal proceedings.
Offshore accountholders may have been unaware of mandates requiring annual reports of foreign accounts to be filed. Despite this, accountholders can still face very significant financial consequences and even the threat of a criminal prosecution. If you had any money at these four institutions or if you are concerned that your bank may also be willing to give your information to U.S. taxing authorities (as an increasing number of banks are doing), you should strongly consider exploring your options with the help of Kevin Thorn, a DC tax evasion attorney.