US DOJ Tax Asst Attorney General Keneally Reports that One third of Swiss Banks Joining US DOJ Swiss Bank Program

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 a few days ago that 106 Swiss banks applied to the program. The exact scope of the program had previously been unknown. Swiss banks had until December 31 to apply to the program.

At least 33 Swiss banks announced through late December that they will join some form of the program, including 19 cantonal banks, or regional lenders typically owned by regional governments. They include Union Bancaire Privee, Edmond de Rothschild Group, EFG International AG (EFGN) and Valiant Holding AG. (VATN). Note that these are the public announcements.  Most Swiss banks are not publicly held and thus do not have to publicly announce bad news.  As noted above, the actual number actually joining is 106.  The U.S. amnesty program did not require that a participating bank make a public disclosure about its application status.

At the conference, Attorney Keneally told attendants that the DOJ viewed every bank in the program as a new source of information and would pursue leads whether the funds in the accounts went to other Swiss banks or to banks in other countries. 

A participating Swiss bank has only 120 days from December 31, 2013 (with one potential 60-day extension) before it must begin to turn over account information to the DOJ. Once the DOJ receives information about such an account holder, s/he is no longer eligible for the OVDP.  Hence, U.S. taxpayers who have or had any kind of interest in an unreported Swiss bank account should strongly consider disclosing that account now through the IRS Offshore Voluntary Disclosure Program (OVDP). The OVDP is a voluntary compliance initiative whereby individuals can receive amnesty from criminal prosecution for their previously unreported offshore bank accounts in exchange for filing amended tax returns and FBARs, and paying all back taxes, interest, and penalties.

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