The increased focus on international tax enforcement by both the IRS and the Department of Justice comes as no surprise. However, the speed at which the United States Government has been able to improve its relationship and obtain information regarding foreign bank accounts held by US taxpayers from foreign governments has been most impressive.
The Department of Justice recently announced a program that will encourage Swiss banks to cooperate in the department’s ongoing investigations of the use of foreign bank accounts to commit tax evasion. The department also released a joint statement with the Swiss Federal Department of Finance, stating that Switzerland will encourage its banks to participate in the program.
Under the program, which is available only to banks that are not currently under criminal investigation by the department for their offshore activities, participating Swiss banks will be required to:
- Agree to pay substantial penalties
- Make a complete disclosure of their cross-border activities
- Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest
- Cooperate in treaty requests for account information
- Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed
- Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations
- Banks meeting all of the above requirements will be eligible for non-prosecution agreements.
Banks currently under criminal investigation related to their Swiss banking activities, and all individuals, are expressly excluded from the program.