The Wall Street Journal reported today (“Credit Swiss Nears Tax-Cheat Deal,” by John Letzing, Francesco Guerrera and David Enrich) ) that Credit Swiss, Switzerland’s second largest bank, is said to be in serious negotiations with the Department of Justice to resolve allegations that it assisted American citizens in evading U.S. income taxes and reporting responsibilities. WSJ reported that although in early stages the settlement is expected to exceed the $780 million fine paid by UBS which entered into a deferred prosecution agreement with the DOJ that also resulted in names of U.S. depositors being submitted to the DOJ. A deal with Credit Swiss is expected to be concluded by mid-year.
Credit Swiss is one of 14 large Swiss banks under criminal investigation by DOJ. Over fifty percent of Switzerland’s smaller government-backed banks not actively under investigation have indicated they will participate in the Swiss Bank Settlement Program under which they will cooperate with the DOJ to avoid possible criminal sanctions but pay fines on a sliding scale depending on the degree of culpability.
The 14 larger banks under investigation are ineligible for the special bank settlement program.
IRS and DOJ have repeatedly indicated they intend no let-up on the aggressive pursuit of offshore tax scofflaws. Those betting on not getting caught or obtaining a better deal later on, are unrealistic.
Meanwhile, the IRS current version of its Offshore Voluntary Disclosure Program is still open as one avenue for those seeking to come in from the cold and make amends for prior tax transgressions without facing jail time. Other means by which to come into compliance are also available and which route is safest or most appropriate for a particular taxpayer involves a complex analysis of fact, law and administrative rules that requires the assistance of a tax attorney experienced in these matters.
Taxpayers should not try to self-navigate the complexities of these decisions through internet searches or from gossip or anecdotal stories from friends. A candid and complete exchange with an attorney under protection of the attorney-client relationship is the safest and wisest way to determine how to proceed with a voluntary disclosure.
© 2014 by Robert S. Steinberg, Esquire
All rights reserved