The latest efforts of the U.S. Justice Department and the Internal Revenue Service to pressure foreign banks was seen when Credit Suisse pled guilty to a wide ranging conspiracy to help U.S. taxpayers evade taxes through offshore accounts. As part of the guilty plea, Credit Suisse will pay $2.6 billion to the federal government and New York financial regulators.
This is just another example of the United States government's pressure on foreign banks to report accounts held by United States citizens and residents. The U.S. government is also pursuing other banks, not only in Switzerland, but in other countries throughout the world.
This latest effort by the U.S. government was publically announced by United States Attorney General, Eric Holder, which underscores the high priority that the U.S. is placing on these efforts to route U.S. account holders with secret offshore accounts.
The U.S. has put a significant effort into forcing Swiss banks to comply with U.S. reporting regulations. In effect, foreign banks are forced to act as policemen to report U.S. taxpayers' foreign accounts. This effort against foreign banks is on-going with no end in sight. Other banks in Switzerland reported as currently under investigation include Julius Baer and Bank Pictet & Cie, as well as others.
The impact upon U.S. citizens holding such accounts can be quite severe. Once U.S. officials learn of an offshore account or beneficial interests in an offshore account, the account holder or beneficiary face investigation and prosecution for tax evasion, false statements on tax returns, as well as failure to disclose the offshore account.
The vigorous efforts of the government to pressure offshore banks into disclosing its U.S. account holders, should alert all those who hold offshore accounts to the importance of entering the Offshore Voluntary Disclosure Program (OVDP). The OVDP allows offshore account holders to avoid criminal prosecution and significantly reduce the amount of civil penalties.
Entry into the OVDP is not permitted if the government has already obtained the account records from the foreign bank. Anyone with an unreported offshore account should act quickly to consult an attorney experienced in criminal tax defense and the OVDP before the foreign bank discloses the account records.