What you need to know and do if your Swiss bank has entered into a Non-Prosecution Agreement
Jeffrey S. Freeman, J.D., LL.M
Swiss banks are in clean up mode and over 100 banks have opted to enter into a Non-Prosecution Agreement (NPA) with the Department of Justice (DOJ). In doing so the banks are admitting that they may have violated U.S. tax laws and will receive a lesser penalty while resolving any compliance issues.
What does this mean for your account?
- Disclosure to DOJ – As part of the NPA, banks must disclose detailed information about their American accounts including how they helped hide their assets, the total number of accounts, the highest dollar value of the account, and the employee names who managed these assets.
- Notification – Your bank will notify you that it has entered a NPA and will request copies of your tax documentation (FBARs, 1040, and W-9 as appropriate) to verify that you were disclosing the account all along to the IRS.
- No more secrecy – Due to the use of “John Doe” Summonses, foreign bank secrecy laws can no longer protect U.S tax payers. If you were not disclosing the funds in this offshore account to the IRS you need to carefully and quickly determine your options.
Cleaning up your compliance issues:
- Do NOT move your account to another foreign bank. There are potential civil and criminal penalties for migrated accounts and with FATCA reporting it is likely that the IRS will find out that the account has been moved causing you more challenges.
- Seek professional help – Contact a tax professional today to help you determine the best course of action. There still may be time to take advantage of voluntary disclosure programs, but seek professional guidance. You do not want to wait for the IRS to discover your non-disclosure.
About Freeman Tax Law
Freeman Tax Law is a boutique tax law firm with national exposure with the expertise and professional staff equipped to handle all domestic and international tax law matters. Freeman Tax Law regularly represents clients in disclosures to the IRS. Our firm also routinely advises banks and financial institutions on how to comply with FATCA and works with consulting/technology firms to implement systems for FFIs. In addition to handling complex tax controversies, the Freeman Tax Law team has extensive expertise in assisting clients with wealth management and estate planning.
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