As reported by Reuters and many other news agencies, Credit Suisse AG, the second largest bank of Switzerland, has notified some of its U.S. clients that it will disclose their identities and account details to the Internal Revenue Service. In a letter dated November 2nd, Credit Suisse says the IRS made a formal request for the information through the Swiss Federal Tax Administration (SFTA). The letter states that the SFTA has issued an order directing the bank to supply the account information. According to Reuters, who obtained a copy of the letter, it says: “This order is immediately executable and Credit Suisse, as an information holder, has no right to appeal”.
The IRS request apparently involves accounts maintained at any time from January 1, 2002, through December 31, 2010. Recipients of the letter are offered two options: either give a written permission for the data to be handed over to Swiss tax authorities, which will then turn it over to the IRS; or hire an attorney in Switzerland to contest the request. The number of U.S. clients due to receive the letter is uncertain. Credit Suisse declined to comment on the matter.
The IRS request for information follows an investigation into claims that Credit Suisse bankers helped dozens of American clients evade taxes. Two current and three former Credit Suisse bankers were indicted earlier this year. This follows the much-publicized 2009 case against UBS, which ended in the bank paying $780 million to settle federal allegations that it helped tens of thousands of American clients hide assets from the IRS. UBS also agreed to disclose the names of about 4,500 U.S. account holders to the IRS.
As we wrote recently, the Swiss government is attempting to reach a global agreement with the U.S. that would cover all Swiss banks.
Copyright (c) 2011 Igor S. Drabkin. All Rights Reserved.