Swiss Banks "Cooperate" with U.S. Officials

March 17, 2012 by Christin Bucci
By Christin Bucci on March 17, 2012 6:33 PM |

Eight Swiss banks recently turned over data on its U.S. clients suspected of tax evasion to U.S. officials. At the Swiss government's request, however, the data was encrypted and will remain so until certain of their own demands are met. According to the Swiss government, the encryption key will not be turned over until Switzerland and the United States reach a broader agreement on information exchange.

Under current Swiss law, non-encrypted data can be transferred only in individual cases under the following circumstances:

(1) U.S. authorities submit a request through the current income tax treaty between the U.S. and Switzerland and

(2) Only if the individual in question has broken Swiss law.

The eleven Swiss banks currently under investigation are: Credit Suisse, Bank Julius Bär, Bank Wegelin & Co., Basler Kantonalbank, Zürcher Kantonalbank, HSBC Private Bank (Suisse), NZB, the Swiss daughter bank LLB, and the Israeli banks Leumi, Hapoalim and Mizrahi. The encrypted data that was transferred includes between 4 and 6 million e-mails between Swiss bankers and their U.S. clients.

Under the agreement in place now, the 11 banks identified by the United States would pay large fines and turn over the names of specific U.S. individuals allegedly involved in tax evasion. The recent split-up of Wegelin & Co., Switzerland's oldest private bank, following the indictment of three of its employees, has added a sense of urgency to the discussions between the countries. The takeover of the bank's non-U.S. business by Raiffeisen Switzerland has been blamed to a large extent on the impact of the ongoing U.S. pressure. Clearly, Switzerland is very anxious to bring this matter to a close.

Our well-qualified tax attorneys can assist you in interpreting the legal and tax ramifications of your offshore accounts. Taxpayers should seek assistance from a tax attorney when determining eligibility for voluntary disclosure.

Contact the Bucci Law Offices today at either 954-764-4440 or 954-764-4440 for your free initial consultation and let our experienced tax attorneys guide you through this stressful time by dealing with the complexities of the tax laws, as well as the IRS and state authorities.