The IRS keeps updating its list of foreign banks which are turning over the names of their US Account Holders, who are now subject to a 50% (rather than 27.5%) penalty in the IRS’s Offshore Voluntary Disclosure Program (OVDP). This penalty is based on the highest account balance measured over up to eight years.
On January 25, 2016 the Justice Department Announced that Leodan Privatbank AG (Leodan) is the 93rd Swiss Bank to reached a resolution under the department’s Swiss Bank Program.
Under the program, banks are required to:
- 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; and
- Pay appropriate penalties.
Until June 2013, Leodan conducted a U.S. cross-border banking business that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the U.S. government. Six private bankers at Leodan, including the Chief Executive Officer, serviced the 44 U.S.-related accounts at the bank.
Leodan opened and maintained undeclared accounts in the names of sham structures that were beneficially owned by U.S. taxpayers, while knowing, or having reason to know, that these structures were used by U.S. clients to help conceal their identities from the IRS. These structured accounts were non-U.S. domiciled entities, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS.
During the period since Aug. 1, 2008, Leodan held a total of 44 U.S.-related accounts, which included both declared and undeclared accounts, with an aggregate peak of approximately $59.42 million in assets under management. Leodan will pay a penalty of $500,000.
The complete list of Swiss Banks which are turning over the names of their US Account Holders, who are now subject to a 50% (rather than 27.5%) penalty in the IRS’s Offshore Voluntary Disclosure Program (OVDP)is as of 1/25/16:
- UBS AG
- Credit Suisse AG, Credit Suisse Fides, and Clariden Leu Ltd.
- Wegelin & Co.
- Liechtensteinische Landesbank AG
- Zurcher Kantonalbank
- swisspartners Investment Network AG, swisspartners Wealth Management AG, swisspartners Insurance Company SPC Ltd., and swisspartners Versicherung AG
- CIBC FirstCaribbean International Bank Limited, its predecessors, subsidiaries, and affiliates
- Stanford International Bank, Ltd., Stanford Group Company, and Stanford Trust Company, Ltd.
- The Hong Kong and Shanghai Banking Corporation Limited in India (HSBC India)
- The Bank of N.T. Butterfield & Son Limited (also known as Butterfield Bank and Bank of Butterfield), its predecessors, subsidiaries, and affiliates
- Sovereign Management & Legal, Ltd., its predecessors, subsidiaries, and affiliates (effective 12/19/14)
- Bank Leumi le-Israel B.M., The Bank Leumi le-Israel Trust Company Ltd, Bank Leumi (Luxembourg) S.A., Leumi Private Bank S.A., and Bank Leumi USA (effective 12/22/14)
- BSI SA (effective 3/30/15)
- Vadian Bank AG (effective 5/8/15)
- Finter Bank Zurich AG (effective 5/15/15)
- Societe Generale Private Banking (Lugano-Svizzera) SA (effective 5/28/15)
- MediBank AG (effective 5/28/15)
- LBBW (Schweiz) AG (effective 5/28/15)
- Scobag Privatbank AG (effective 5/28/15)
- Rothschild Bank AG (effective 6/3/15)
- Banca Credinvest SA (effective 6/3/15)
- Societe Generale Private Banking (Suisse) SA (effective 6/9/15)
- Berner Kantonalbank AG (effective 6/9/15)
- Bank Linth LLB AG (effective 6/19/15)
- Bank Sparhafen Zurich AG (effective 6/19/15)
- Ersparniskasse Schaffhausen AG (effective 6/26/15)
- Privatbank Von Graffenried AG (effective 7/2/15)
- Banque Pasche SA (effective 7/9/15)
- ARVEST Privatbank AG (effective 7/9/15)
- Mercantil Bank (Schweiz) AG (effective 7/16/15)
- Banque Cantonale Neuchateloise (effective 7/16/15)
- Nidwaldner Kantonalbank (effective 7/16/15)
- SB Saanen Bank AG (effective 7/23/15)
- Privatbank Bellerive AG (effective 7/23/15)
- PKB Privatbank AG (effective 7/30/15)
- Falcon Private Bank AG (effective 7/30/15)
- Credito Privato Commerciale in liquidazione SA (effective 7/30/15)
- Bank EKI Genossenschaft (effective 8/3/15)
- Privatbank Reichmuth & Co. (effective 8/6/15)
- Banque Cantonale du Jura SA (effective 8/6/15)
- Banca Intermobiliare di Investimenti e Gestioni (Suisse) SA (effective 8/6/15)
- bank zweiplus ag (effective 8/20/15)
- Banca dello Stato del Cantone Ticino (effective 8/20/15)
- Hypothekarbank Lenzburg AG (effective 8/27/15)
- Schroder & Co. Bank AG (effective 9/3/15)
- Valiant Bank AG (effective 9/10/15)
- Bank La Roche & Co AG (effective 9/15/15)
- Belize Bank International Limited, Belize Bank Limited, Belize Corporate Services Limited, their predecessors, subsidiaries, and affiliates (effective 9/16/15)
- St. Galler Kantonalbank AG (effective 9/17/15)
- E. Gutzwiller & Cie, Banquiers (effective 9/17/15)
- Migros Bank AG (effective 9/25/15)
- Graubundner Katonalbank (effective 9/25/15)
- BHF-Bank (Schweiz) AG (effective 10/1/15)
- Finacor SA (effective 10/6/15)
- Schaffhauser Kantonalbank (effective 10/8/15)
- BBVA Suiza S.A. (effective 10/16/15)
- Piguet Galland & Cie SA (effective 10/23/15)
- Luzerner Kantonalbank AG (effective 10/29/15)
- Habib Bank AG Zurich (effective 10/29/15)
- Banque Heritage SA (effective 10/29/15)
- Hyposwiss Private Bank Genève S.A. (effective 10/29/15)
- Banque Bonhôte & Cie SA (effective 11/3/15)
- Banque Internationale a Luxembourg (Suisse) SA (effective 11/12/15)
- Zuger Kantonalbank (effective 11/12/15)
- Standard Chartered Bank (Switzerland) SA, en liquidation (effective 11/13/15)
- Maerki Baumann & Co. AG (effective 11/17/15)
- BNP Paribas (Suisse) SA (effective 11/19/15)
- KBL (Switzerland) Ltd. (effective 11/19/15)
- Bank CIC (Switzerland) Ltd. (effective 11/19/15)
- Privatbank IHAG Zürich AG (effective 11/24/15)
- Deutsche Bank (Suisse) SA (effective 11/24/15)
- EFG Bank AG (effective 12/3/15)
- EFG Bank European Financial Group SA, Geneva (effective 12/3/15)
- Aargauische Kantonalbank (effective 12/8/15)
- Cornèr Banca SA (effective 12/10/15)
- Bank Coop AG (effective 12/10/15)
- Crédit Agricole (Suisse) SA (effective 12/15/15)
- Dreyfus Sons & Co Ltd, Banquiers (effective 12/15/15)
- Baumann & Cie, Banquiers (effective 12/15/15)
- Bordier & Cie Switzerland (effective 12/17/15)
- PBZ Verwaltungs AG (effective 12/17/15)
- PostFinance AG (effective 12/17/15)
- Edmond de Rothschild (Suisse) SA (effective 12/18/15)
- Edmond de Rothschild (Lugano) SA (effective 12/18/15)
- Bank J. Safra Sarasin AG (effective 12/23/15)
- Coutts & Co Ltd (effective 12/23/15)
- Gonet & Cie (effective 12/23/15)
- Banque Cantonal du Valais (effective 12/23/15)
- Banque Cantonale Vaudoise (effective 12/23/15)
- Bank Lombard Odier & Co Ltd (effective 12/31/15)
- DZ Privatbank (Schweiz) AG (effective 12/31/15)
- Union Bancaire Privée , USP SA (effective 1/6/16)
- PHZ Privat - und Handelsbank Zürich AG reorganized as Leodan Privatbank AG (effective 1/25/16)
Outside of these banks, the norm within the OVDP remains 27.5%. That is far better than prosecution or much bigger civil penalties. Some taxpayers, including taxpayers with accounts at one of the 93 Swiss Banks listed abover can opt for the easier and less costly Streamlined program. This list does not impact the Streamlined programs because you must be non-willful to qualify. All of this is part of the June 2014 improvements to the OVDP, which sparked new interest in cleaning up offshore accounts.
- With roughly 96 Swiss banks taking the DOJ deal and
- FATCA requiring the entire world to report to the IRS
it is inevitable that this increased disclosure, will result in Every American eventually being discovered. Banks worldwide want to know if there US clients are compliant with the IRS.
Within the OVDP, people who pre-cleared before the various effective dates are generally safe from the higher 50% penalty. As additional banks are added to the list, only those American taxpayers that request pre-clearance before their bank is listed, will get the 27 1/2% OVDP penalty. The 50% penalty now applies to all taxpayers with accounts at financial institutions or with facilitators which are named, are cooperating or are identified in a court filing such as a John Doe summons.
Although the 50% penalty is high, willful civil violations can result in tax, penalties and interest totaling 325% of the highest balance in the account for the most recent six years period. Recent guidance suggests that the IRS could be more lenient in the future, but the IRS’s definition of leniency can still make the OVDP a very good deal that provides certainty.
Do You Have Undeclared Income from one of
These Swiss Banks or
Swiss Asset Management Company?
Is Your Name Being Handed Over to the IRS?
Want to Know if the OVDP Program is Right for You?
Contact the Tax Lawyers at
Marini& Associates, P.A.
for a FREE Tax Consultation
at: www.TaxAid.us or www.TaxLaw.ms or
Toll Free at 888-8TaxAid (888) 882-9243
Read more at: Tax Times blog
