The new US-Swiss agreement will also require disclosure, to the United States, of the US financial institutions, US persons and the intermediaries who guided the US persons, who where connected with “US Related Accounts” that were maintain by the Swiss Banks.
This exposes the institutions and persons to possible prosecution for Conspiracy to Commit US Tax Evasion and, for the individuals, Failure to File the Foreign Bank Account Report.
There is a major probability that the US persons who have or had accounts at Swiss banks were not all just tax evaders, but who also are or were hiding the proceeds of crimes committed in the United States, such as public corruption, fraud, money laundering and others.
These persons now have a higher probability of being prosecuted for these crimes and of having their Swiss money be the subject of asset recovery efforts by the US government or private sector victims.
In any case, all US persons who are Swiss account holders will have to answer to the IRS, which has a wide array of tools to determine the source and destination of funds.
In a statement announcing the agreement, Deputy Attorney General, James M. Cole said...
The US Can Use Swiss Data for Enforcement Actions!
The new agreement makes clear that “personal data provided by the Swiss banks… will be used and disclosed only for purposes of law enforcement (which may include regulatory action) in the United States or as otherwise permitted by US law.”
The agreement marks four avenues by which three categories of Swiss banks may find their way to softer treatment by the US. One category of Swiss banks, Category 1, is told the door to laxer US treatment is closed because they are under US criminal investigation. The US Justice Department has said 14 banks
now fall in Category 1.
The four categories of banks and their treatment are as follows:
A Category 2 bank must “fully” disclose to the Justice Department how it ran its “cross-border business for US accounts,” how it was “structured, operated, and supervised,” the names of the persons who ran the business, how it “attracted and service account holders,” and all US accounts and their “maximum dollar value” at certain key dates.
The bank must also make an “in-person presentation and documentation” providing full details of its operations in English. It must also disclose the US accounts that were closed, their holdings
and identify the “US person or entity affiliated… with each account,” including their “beneficial interest.”
The bank must promise to cooperate in treaty requests by the US for information on the US accounts.
The banks must also tell the US “the name and function of any relationship manager, client advisor, asset manager, financial advisor, trustee, fiduciary, nominee, attorney, accountant, or other individual or entity known to be affiliated with (the accounts).”
It must also provide “information on the transfer of funds into and out of the account on a monthly basis,” including cash deposits or withdrawals; if an intermediary, such as a financial adviser, attorney, accountant or others, facilitated transfers; the identity and location of financial institutions that transferred or received funds from the account, and the countries “to or from which funds were transferred.”
The Swiss banks must keep for 10 years pertinent records “relating to their US cross-border business” and, if requested, provide witnesses and information for US treaty requests for other information and documents.
The banks must close the accounts of “recalcitrant account holders,” as defined by IRS regulations and prevent employees from “assisting recalcitrant account holders.”
The banks must pay penalties of 20% of the “maximum aggregate dollar value” of all US Related Accounts they held on August 1, 2008, which was, generally, when the UBS US tax evasion conspiracy was exposed.
Meanwhile, FATCA, the other international dragnet from the United States approaches implementation on June 1, 2014.
Do You Have A Un-Reported Swiss Bank Account?
Contact the Tax Litigation Lawyers of
Marini & Associates, P.A.
or Toll Free at 888-8TaxAid (888 882-9243).