We have discussed changes to the U.S. Internal Revenue Service limited-amnesty program for hidden offshore accounts over the last month.
As a result of Justice Department investigations and a crack down on offshore accounts over the last six years, UBS agreed to pay $780 million in a 2009 deferred prosecution agreement. Earlier this year, Credit Suisse reached a $2.6 billion settlement. In our July 1 post, we listed some of the other banks still under investigation.
Reportedly, some Swiss banks are now offering aid to Americans who have not disclosed their offshore accounts.
A self-reporting program set up by the Justice Department will help banks that believe they might have aided tax evasion. These banks agreed to turn over data on their clients to avoid criminal charges. A bank can avoid or lower penalties by encouraging its clients to disclose accounts to the IRS preemptively. The disclosure of hidden funds would be subtracted from bank penalty amounts.
Some Swiss banks are offering a fixed financial incentive of $5,000 to help clients with fees and penalties associated with the voluntary disclosure program. In limited situations, financial advisers say that banks are offering to share legal and accounting costs.
Banks offering financial assistance to clients include:
- Coutts Swiss branch, which is a division of the Royal Bank of Scotland Group, PLC
- Union Bancaire Privee based in Geneva
- Bank Coop AG in Basel
Another bank in the Justice Department program, Zuger Kantonalbank, has offered to pay for its client’s initial consultation with a tax attorney to discuss voluntary disclosure.
If you own or have signature authority over a Swiss bank account valued at more than $10,000 and have never filed an FBAR, speak with a voluntary disclosure attorney soon to avoid harsh civil and criminal penalties.
Source: The Wall Street Journal, "Taxpayers Get Incentives to Report," John Letzing, July 19, 2014.