<link rel="stylesheet" href="//fonts.googleapis.com/css?family=Exo:100,200,300,regular,500,600,700%7CRaleway:300,regular,600,700%7COpen+Sans:300,300italic,regular,italic,600,600italic%7CMontserrat:300,300italic,regular,italic,600,600italic">Most Swiss banks participating in the US Department of Justice (DOJ) amnesty program seek extension to disclose - Tax, Estate Planning & Probate Law Center

Most Swiss banks participating in the US Department of Justice (DOJ) amnesty program seek extension to disclose

By April 30, 2014, unless granted a 60-day extension, all Swiss banks participating in the US Department of Justice (DOJ) amnesty program will be required to provide substantial client information on its US account holders.  We have previously posted on the U.S. Justice Department’s program offered to Swiss banks and targeted to identifying U.S. taxpayers that have not disclosed foreign accounts to the IRS.  It has now been stated that that one-third of all Swiss banks offered amnesty actually applied to the program. Kathryn Keneally, Assistant Attorney General for the Tax Division, disclosed at an ABA conference that 106 Swiss banks applied to the program.

Most Swiss banks used by our clients have requested (or will request) a 60-day extension to provide substantial client information on its US account holders.

Following is a list of banks which have said they will take part in the government-brokered program by grouping themselves into categories depending on whether they had U.S. clients.

CATEGORY 2

Swiss banks in this group have a reason to believe they may have committed tax offenses, and are eligible for a non-prosecution agreement if they come clean and face fines. Banks which have said they will do so include:

EFG International

Banque Privee Edmond de Rothschild

St. Galler Kantonalbank

Banque cantonale de Geneve

Berner Kantonalbank

Banque Cantonale Vaudoise

Graubuendner Kantonalbank

Banque cantonale du Jura

Zuger Kantonalbank

Luzerner Kantonalbank

Valiant

Linth Bank

Coop Bank

Walliser Kantonalbank

Hypothekarbank Lenzburg

Unlisted banks in category 2

Union Bancaire Privee (UBP)

Rothschild Bank

Lombard Odier

CATEGORY 3, 4

These Swiss banks have not engaged in criminal conduct or are deemed “compliant” under U.S. tax rules. They would receive a non-target letter and not face fines. Banks which have said they will do so include:

Vontobel

Bank am Bellevue

Basellandschaftliche Kantonalbank

Valartis said it will decide at a later time whether to register for Category 3 or not to participate in the program at all.

 

This all should serve as an urgent reminder for US taxpayers that have unreported foreign assets to participate in the IRS Off-shore Voluntary Disclosure Program (OVDP) or seek to correct tax noncompliance through other avenues. The OVDP offers an incentive for delinquent tax payers to disclose their offshore accounts.

Taxpayers can become compliant, eliminate the risk of criminal prosecution, and greatly reduces the civil penalty exposure by disclosing and paying taxes due plus interest. Applying to the OVDP involves submitting eight amended tax returns with taxes, penalties and interest, eight FBARs, and a 27.5% miscellaneous offshore penalty.

Once Swiss banks turn in the required information, which will occur in the next few months, it will be likely too late for individuals to take advantage of the OVDP and voluntarily admit their noncompliance. With 106 Swiss banks participating in the Voluntary Disclosure Program for banks the timeline is getting even shorter. The IRS has the power at anytime to blacklist and designate specific banks whose account holders will no longer be eligible to participate in the OVDP.

 

The IRS and DOJ will continue to gather and use the information obtained from banks to identify, audit, and prosecute noncompliant individuals. If the IRS identifies you noncompliance through the amnesty program you face near certain IRS scrutiny, significant liabilities, severe and confiscatory array of civil penalties, and the threat of criminal prosecution.

 

The OVDP is a complex program and only experienced legal counsel can ensure that your case is handled properly.  The 2013 National Taxpayer Advocate Report it shows that those individuals that chose to be unrepresented received disproportionately higher penalties.