Tax Evasion Schemes in Switzerland Under Scrutiny as US Department of Justice Announces New Program

Crackdown on Tax Evasion Schemes: US Department of Justice Launches New Program

The United States Department of Justice has announced a new program aimed at cracking down on tax evasion schemes involving Swiss banks. The program, released jointly with the Swiss Federal Department of Finance, encourages Swiss banks to cooperate with ongoing investigations into the use of foreign bank accounts to commit tax evasion.

Key Features of the Program

Participating Swiss banks will be required to agree to pay substantial penalties and provide detailed information on an account-by-account basis for accounts in which US taxpayers have a direct or indirect interest.
Banks that meet these requirements will be eligible for non-prosecution agreements.
The program holds banks accountable for opening secret accounts after it became publicly known that the department was actively investigating offshore tax evasion in Switzerland.

Requirements for Non-Prosecution Agreements

Participating Swiss banks must agree to a penalty equal to 20 percent of the maximum aggregate dollar value of all non-disclosed US accounts held by the bank on August 1, 2008.
Banks must also make a complete disclosure of their cross-border activities.

Impact of the Program

The program is expected to significantly assist the department’s efforts to investigate and prosecute US taxpayers who attempted to evade taxes by hiding their assets in secret offshore accounts.
It provides a path for Swiss banks that were not engaged in wrongful acts with US taxpayers but nonetheless want to resolve their status.

Previous Investigations and Prosecutions

Since 2009, the department has charged more than 30 banking professionals and 68 US account holders with violations arising from their offshore banking activities.
Fifty-four US taxpayers and four bankers and financial advisors have pleaded guilty, and five taxpayers have been convicted at trial.

Assistant Attorney General for the Tax Division Kathryn Keneally said that banks that come forward under the program have the opportunity to reach a resolution with the United States.
Danny Werfel, Acting Commissioner of the Internal Revenue Service, added that the program is another positive step forward in the US government’s efforts to combat offshore tax evasion.

Resources

The full joint statement and program can be found on the Department of Justice’s website. Those who are concerned about potential criminal liability should contact the department’s Tax Division or the prosecutors handling their case if they wish to seek resolution.