Swiss Bank Settlement BSA/US DOJ

The U.S. Department of Justice released the signed Non-Prosecution Agreement (NPA) with Swiss Bank BSI SA.

The agreement includes a $211m penalty, a thorough disclosure of BSI cross-border business for U.S. related accounts, disclosure of those individuals who structured, operated or supervised the cross-border business for U.S. related accounts, and how BSI attracted and serviced account holders.

U.S. taxpayers with undisclosed offshore accounts (with unreported income) face lengthy jail terms and expensive civil penalties which included the IRC civil fraud penalty (75% of the tax due for the unreported income), and the Bank Secrecy Act (greater of $100k or 50% of the highest account balance for up to 6 years, i.e. 300% of the account balance).

In S. Millar’s 4/25/15 posting “Swiss Banks BSI SA Settlement” he posits that this NPA could be the future template for Swiss bank settlements. If so, the U.S. taxpayers (estimated to be up to 10m by the IRS) with undisclosed offshore accounts face “financial ruin”, and jail.

U.S. Taxpayers in this predicament are advised to enter the IRS Offshore Voluntary Disclosure Program which to date has failed to attract less than 1% of affected taxpayers (i.e. less than 50k taxpayers have come forward out of up to 10m). The reasons are multiple: expensive penalties, waiver of statute limitations defenses, constitutional defenses (5th amendment right against self-incrimination, 4th amendment right against unreasonable searches and seizures, 8th amendment right against excessive fines). In addition, U.S. taxpayers who enter the OVDP may either be declined or thrown out (for no reason given) and the extensive incriminating evidence they produce to the IRS may be used against
them for criminal prosecution.

For those U.S. taxpayers with these tax issues, I recommend my trade secret tax strategy (which has been used successfully for US taxpayers) which includes: a full disclosure, a reasonable cause exception and a waiver of penalties request. If successful this strategy results in no criminal prosecution, payment of tax and interest and no civil penalties under either the IRC or the BSA.

For more information please send me an email with your questions.

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