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February 7, 2017


Credit Suisse Handing Over U.S. Account-Holder Information

The term “Swiss bank account” has long been synonymous with secrecy and security. However, that reputation may be dwindling as another Swiss bank prepares to turn over information about U.S. account-holders to the Internal Revenue Service (IRS). The U.S. government is focusing on eradicating tax evasion by looking at taxpayers’ foreign investments and offshore accounts, and people they investigate could face serious criminal charges.

The U.S. Focusing on Foreign Account Holders

In an effort to investigate U.S. citizens, the IRS requested information about persons who held accounts in Swiss banks indirectly through corporations from 2002-2010 from the Swiss Federal Tax Administration, pursuant to a 1996 tax convention between the two countries. In response, the Swiss government issued an order to Credit Suisse, the country’s second-largest bank, requiring the bank to give the Swiss government the information about U.S. account-holders the IRS sought.

Credit Suisse has begun to send out letters to its account-holders, notifying them of the information release. The letters also alerted account-holders that they had two options regarding the bank’s action: they could consent to the information release or file an appeal with the Swiss government.

The U.S. is pursuing leads in tax evasion investigations that it obtained through participants in the 2011 Offshore Voluntary Disclosure Initiative (OVDI), an amnesty program that allowed people with undeclared offshore assets to become current in their tax obligations while avoiding criminal prosecution. As part of the program, participants had to disclose names of those who helped them set up offshore accounts.

The U.S. informed Credit Suisse in July 2011 that the Department of Justice (DOJ) was looking at the bank as part of a broader criminal tax evasion investigation after the February 2011 indictment of four bankers with ties to Credit Suisse on charges that they helped Americans evade taxes.

Criminal Charges

If the IRS and the DOJ find incriminating information about U.S. citizens with Swiss bank accounts, those account-holders could face serious criminal charges such as tax evasion, willful failure to pay taxes or fraud.

Those convicted of tax evasion or willful failure to pay taxes face up to five years in prison, along with a criminal fine of up to $250,000. Penalties for fraud include up to three years in prison and a possible fine of up to $250,000.

The IRS takes tax evasion very seriously and the U.S. is marshaling its resources to eliminate offshore tax evasion. The authorities will not hesitate to prosecute cases to the fullest extent possible. If you are facing criminal tax charges, contact an experienced attorney to help you protect your rights.