Credit Suisse has begun notifying some of its U.S. customers that it will be disclosing their names to the Internal Revenue Service.
The bank has started sending out letters to some of its customers informing them that it intends to turn over their names and the details of their accounts to the IRS, according to Reuters. The letter referred to a request from the IRS to the Swiss Federal Tax Administration based on a tax treaty between the U.S. and Switzerland. The Swiss authorities issued an order compelling the bank to comply.
“In connection with the IRS treaty request, the SFTA has issued an order directing Credit Suisse to submit responsive account information to the SFTA,” said the letter. “This order is immediately executable and Credit Suisse as an information holder has no right to appeal.”
The Swiss bank has come under pressure from the Justice Department and the IRS in recent months, with the former head of its North American Offshore Banking Unit being charged along with other executives at the Zurich-based bank in July (see Credit Suisse Officials Charged in Tax Conspiracy and Credit Suisse Targeted in Tax Inquiry).
The IRS request covers accounts maintained at any time between Jan. 1, 2002 and Dec. 31, 2010, according to the letter. Credit Suisse clients have the option of either agreeing to the handover of their information or contesting it with Swiss authorities.
Before Credit Suisse, the IRS had primarily targeted another Swiss bank, UBS. The Swiss government agreed to disclose the identities of about 4,450 clients of UBS in 2009 after UBS signed a deferred prosecution agreement with the Justice Department under which it agreed to pay $780 million. Several other Swiss banks, including Julius Baer and Basler Kantonalbank, are reportedly also under investigation.
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