A critical deadline is coming up for Swiss banks on December 31st. Under agreements put in place last summer, the IRS has implemented a bank version of its offshore voluntary disclosure programs (OVDP /OVDI) that have been in place for individuals since 2009.
The programs offered to these Swiss banks may have serious ramifications for their depositors. These programs provide for the banks to obtain non-prosecution agreements from the IRS. Banks may also seek non-target letters. What’s perhaps most important is what these agreements do not include. They provide protection only for the banks, not for any of their depositors.
Part of the requirements for a Swiss bank to obtain one or more of these agreements is a for the Swiss bank to offer up (“hand over”) information regarding its U.S. depositors and its employees and agents. In some if not many cases, this information will provide the IRS with a road map of how Swiss bank employees and agents may have advised U.S. depositors to commit criminal violations of the Internal Revenue Code. It also provides a quite literal road map to the front door of U.S. depositors who may have not disclosed their foreign offshore accounts and or failed to report income from those accounts.
In our practice we are aware of stepped up pressure by certain Swiss banks to encourage their U.S. account holders to enter into the IRS Offshore Voluntary Disclosure Program. Examining the details of the IRS Non-Prosecution Agreements may provide the motivation for this. One of the requirements s of the program is for the Swiss bank to pay penalties for its potentially criminal actions. One way for the Swiss banks to reduce the amount of the penalties is to show substantial efforts to encourage U.S. depositors to enter into the IRS disclosure (OVDP) initiative. Moreover the first deadline for submitting an application for a Non-Prosecution Agreement is December 31, 2013 thereby providing a possible reason for Swiss banks to ramp up pressure on its U.S. Offshore Account Holders.
Horowitz Law Offices represents U. S. taxpayers who maintain foreign offshore bank accounts. You are welcome to contact us at: 312 787 5533 or firstname.lastname@example.org .