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Swiss Life Cooperating with DOJ

Posted in Offshore Account Update on August 17, 2017 | Share

The Department of Justice and U.S. taxing authorities have been very aggressive in recent years in fighting the problem of offshore tax evasion. U.S. authorities have gone far beyond just investing foreign financial accounts and investments and are investigating a wide variety of tax-reduction techniques, including the use of insurance wrappers.

One technique the DOJ has been using in  its investigations is to make deals with foreign financial institutions to limit the penalties that those institution face if the institutions cooperate with U.S. officials in disclosing the ways they helped Americans evade taxes. Cooperating banks and foreign financial entities must disclose details about accountholders, in addition to paying fines, but they avoid criminal prosecution and penalties.

Because many foreign financial institutions have chosen to cooperate with the DOJ, many accountholders have had their information turned over and have come under investigation by the IRS. Substantial criminal and civil penalties can result for taxpayers.  Now, Swiss Life Holding AG is yet another foreign financial institution which is likely to provide accountholder information as part of a deal with the DOJ. 

A Washington DC criminal tax lawyer should be consulted if you have an account with Swiss Life, or if you have any offshore accounts that you have not followed disclosure rules for.  You may have options for limiting the penalties that could result if the IRS discovers your offshore account before you have voluntarily disclosed it, so you should talk with an attorney as soon as you can.

Swiss Life is in Discussions with the Department of Justice

Swiss Life Holding AG has a substantial portfolio of accounts that belong to U.S. affiliated taxpayers or that U.S. affiliated taxpayers have signature authority on. The total value of Swiss Life's portfolio of U.S. clients is worth approximately $258 million, which means that many accountholders with valuable offshore assets have invested in financial institutions controlled by Swiss Life.

If Swiss Life comes to an agreement with the Department of Justice in order to reduce its penalties for helping their U.S. accountholders to evade their tax obligations, they will join a long line of banks that have cooperated with the government and made disclosures.  Foreign financial institutions including USB Group AG and Julius Baer Group, Ltd. have also cooperated with the government and have paid millions of dollars in fines.

The fines that Swiss Life will pay are likely to be far less than those incurred by other major institutions, including Credit Suisse Group AG, which incurred a $2.6 billion penalty in 2014.  Estimates for the penalty Swiss Life may owe come in at around 100 million francs.  If the bank settles its legal problems with the IRS by paying this fine and turning over accountholder information, the DOJ will likely try to collect millions more in penalties and fees from the taxpayers whose account information Swiss Life provides to them. 

If you have offshore funds and are not in full compliance with tax laws, you should be very concerned about the growing number of financial institutions giving information to the DOJ. You should contact Kevin Thorn, a Washington DC criminal tax lawyer, today to find out what options you have available to try to protect yourself from criminal prosecution and to limit your civil fines


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