300 banks in Switzerland are racing to meet a December 31 deadline. The banks with “reason to believe” they violated U.S. tax laws, have enlisted a team of auditors, lawyers as well as in-house workers to seek U.S. amnesty for helping American clients evade taxes, according to Bloomberg.
The Swiss government is encouraging the banks to join the program, announced on August 29. Still the Swiss Bankers Association has criticized the program’s cost and has troubling questions, such as who will qualify as a U.S. client and what holdings are considered untaxed. The results could determine how much a bank must pay in penalties.
A partner in Deloitte LLP’s forensic services, practice in Switzerland, David Fidan reported, “The hard work is getting to the right data and cutting through complex systems to get all the facts on the table.”
Businessweek reports that SBA spokeswoman Sindy Schmiegel stated, “It’s necessary for the banks to do a deep analysis of their clients and the history of those relationships.”
After evaluating their accounts, the banks must weigh whether to enter the program or they risk detection by the U.S. if they don’t. It has been reported that 32 banks so far have announced they will join some form of the program.
In 2009 the U.S. charged UBS AG (UBSN), the biggest Swiss bank, with helping Americans hide $20 billion in assets. It was Swiss bank secrecy that protected American tax cheats for decades. At least 38,000 taxpayers avoided prosecution. UBS avoided prosecution by admitting it promoted tax evasion and by paying $780 million. It handed over 4,700 accounts. The U.S. prosecuted 100 taxpayers, bankers, lawyers and advisers for offshore tax crimes and disclosing which offshore banks and advisers helped them hide assets.
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