A new program allowing Swiss banks to cooperate with U.S. tax authorities means that the days of U.S. citizens successfully keeping their numbered Swiss bank accounts hidden from the prying eyes of the IRS could be coming to an end.
The U.S. Justice Department announced the program late last month, making it available only to banks that are not currently under criminal investigation by the Justice Department for their offshore activities (see Swiss Government Encourages Banks to Settle U.S. Tax Disputes). Under the program, banks will be required to agree to pay substantial penalties, make a complete disclosure of their cross-border activities, and provide detailed information on each account in which their U.S. taxpayer customers have a direct or indirect interest. Swiss banks would also be required to cooperate in U.S. treaty requests for account information, as well as provide detailed information on other banks that have transferred funds into secret accounts or that have accepted funds when secret bank accounts were closed. The Swiss banks also must agree to close the accounts of any customers who fail to come into compliance with their U.S. reporting obligations.
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