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Offshore tax evasion probe nets new records from Credit Suisse

One month ago, we included a story on our California blog about Swiss banks providing employee information to the U.S. government. That disclosure by five banks, including Credit Suisse, HSBC and others, instigated a furor among that country's banking community as many bankers perceived the release of their names as a betrayal of confidence.

It appears that the disclosures are not finished, however. Credit Suisse is preparing to turn over more internal documents to the U.S. government to aid in the Internal Revenue Service's investigation into offshore tax evasion. The documents reportedly consist of e-mails between bank employees and U.S. clients as well as internal e-mails among bankers concerning accounts held by U.S. clients. The e-mails run from 2001 through 2011. Client information has apparently been redacted from the records.

While bank employees may be nervous that the release of their names will eventually subject them to an investigation, government authorities indicated that the bankers whose names are in the soon-to-be-disclosed records are not under suspicion of aiding in tax evasion. Unlike the first release of information, however, Credit Suisse will inform affected employees before it sends the e-mail documents to U.S. officials if the employees make a request.

Since 2011, Credit Suisse has been the formal object of a Department of Justice inquiry into alleged tax evasion practices at the bank. The Swiss government has attempted to reach a comprehensive agreement with U.S. authorities on the tax evasion issue on behalf of all banks, but the negotiations have not been very fruitful thus far.

This story highlights the inexorable march towards the disclosure of more information about Swiss bank accounts. As the IRS and the Justice Department continue to apply pressure to individual banks and the Swiss government, the importance of compliance with all offshore account laws rises.

Source: The Wall Street Journal, "Credit Suisse to Give More Files," Anita Greil, Sept. 17, 2012

• Holding overseas assets is legal, but U.S. taxpayers must ensure that they meet all reporting and payment requirements. You can learn more by visiting my Irvine offshore bank account page.

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