As posted by several new sources yesterday, this Swiss government has apparently proposed a multibillion-dollar settlement with the U.S. in response to the allegations that it helped American taxpayers avoid billions of dollars in U.S. taxes. The proposed civil settlement, made recently by Swiss authorities to the IRS, would cover all banks in Switzerland (about 355) and could reach more than $10 billion. The deal would supposedly cover those 11 banks, which are currently under criminal investigation by the Department of Justice (including Credit Suisse AG and HSBC).
It is believed that the settlement proposal has been met with skepticism from the Justice Department, which wants to exclude those 11 or so banks from a civil settlement. The IRS, which referred the names of the 11 banks to the Justice Department, is conducting a civil investigation of many other Swiss banks.
Furthermore, the Swiss settlement proposes to pay a large fine without turning over any client names or client data, however, the IRS and the Justice Department are likely to oppose any deal that involves only money and does not provide for a turnover of client information.
In September of 2011, the IRS mailed a one-page questionnaire, containing questions about contacts with offshore banks, to many taxpayers who already entered IRS Voluntary Disclosure programs related to offshore accounts. The questionnaire has 10 questions regarding undeclared offshore accounts and taxpayers’ interaction with foreign financials institutions. It is possible that this is one of the first steps towards new John Doe summons.
We will continue to monitor developments and news related to any possible deal between the Swiss government and the U.S. Holtz, Slavett & Drabkin attorneys can assist you with questions about foreign bank accounts and compliance with the IRS requirements.
Copyright (c) 2011 Igor S. Drabkin. All Rights Reserved.