German Authorities Get Closer to Obtaining Credit Suisse Client Information on Undisclosed Offshore Accounts
German authorities raided 13 Credit Suisse branches, on July 14, 2010, in an effort to target and investigate Credit Suisse staff suspected of advising clients on how to evade taxes. The raids on the second largest Swiss bank were instigated by German authorities, who earlier this year, acquired information that led to the opening of investigations on wealthy Credit Suisse account holders.
These investigators hope to spur a large-scale movement through international tax authorities to diminish tax evasion within Swiss private banks. Other countries are following Germany’s lead in an effort to boost tax revenue where there are millions of unpaid taxes due.
Tax authorities have previously urged Swiss bank account holders to come forward and maintain current compliance where they have tax responsibilities. While many have done so, there are still hundreds of account holders who have yet to disclose their information.
Based on frequently occurring investigations, it seems more likely that UBS account holders that have not come forward will be investigated by the Criminal Investigation Division of the Internal Revenue Service and will potentially face criminal charges and severe civil sanctions.
Prosecution and sanctions are not limited to U.S. taxpayers who failed to disclose UBS accounts. The U.S. government has been very vocal about pursuing U.S. taxpayers at other foreign banking institutions as well. Sources within the U.S. government have indicated that agreements similar to the very public one with UBS have been or are in the process of being completed with foreign banks in Switzerland and other countries. We urge foreign account holders to come in compliance through voluntary disclosures if they have not done so already.