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US Justice Department cracks down on Swiss banking privacy
| Published: | 29 Oct at 6 PM |
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Swiss banks are being hounded by the US Justice Department to reveal all details of USA citizens’ secret accounts. Prosecutions as well as FATCA are being used to force traditionally private Swiss banks to give up the full details of money in accounts held by expats attempting to avoid paying tax in their home country.
Switzerland was one of the last countries to sign up for the controversial US Foreign Account Tax Compliance Act. Credit Suisse and USB were the first banks to be hit by billions in fines for not revealing the full details of suspected tax-avoidant US citizens.
One bank has already closed as a result, and the Justice Department has offered another 100 Swiss banks a special deal to avoid prosecution by releasing details of all dealings with their American customers. Fourteen more banks are now threatened by court proceedings started before the offer of partial immunity to the rest of the Swiss banking community.
The Justice Department’s aim is to trap and fine all banks which allowed US taxpayers to open secret accounts, with a sliding scale of penalties starting at 20 per cent and rising to 50 per cent of the total value of all accounts. At the same time, the IRS is threatening US taxpayers who haven’t declared their offshore earnings, stating that settlement terms will be imposed.
As a result, an ever-increasing number of US expats living overseas are preparing to give up their citizenship, as much in protest as in an attempt to protect their investments. Many may not be guilty of tax avoidance, but still fear the draconian powers given by the introduction of FATCA as well as the confusing nature of the tax returns required every year.
Switzerland was one of the last countries to sign up for the controversial US Foreign Account Tax Compliance Act. Credit Suisse and USB were the first banks to be hit by billions in fines for not revealing the full details of suspected tax-avoidant US citizens.
One bank has already closed as a result, and the Justice Department has offered another 100 Swiss banks a special deal to avoid prosecution by releasing details of all dealings with their American customers. Fourteen more banks are now threatened by court proceedings started before the offer of partial immunity to the rest of the Swiss banking community.
The Justice Department’s aim is to trap and fine all banks which allowed US taxpayers to open secret accounts, with a sliding scale of penalties starting at 20 per cent and rising to 50 per cent of the total value of all accounts. At the same time, the IRS is threatening US taxpayers who haven’t declared their offshore earnings, stating that settlement terms will be imposed.
As a result, an ever-increasing number of US expats living overseas are preparing to give up their citizenship, as much in protest as in an attempt to protect their investments. Many may not be guilty of tax avoidance, but still fear the draconian powers given by the introduction of FATCA as well as the confusing nature of the tax returns required every year.
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