The Automatic Exchange of Bank Data: Deal Expected Between the Swiss and U.S.Offshore Account Update
Posted on January 20, 2017 | Share
The United States government has been aggressively pursuing undeclared revenue by cracking down on offshore bank accounts. There are numerous tools that the U.S. government has been using to find out details on accounts kept offshore that have not been properly declared, including a program by which Swiss banks were offered amnesty from crimes related to facilitating tax evasion if they came forward, reported account holders and provided details about transactions.
As aggressive as the United States has been, there have still been some practical limitations on when and how quickly taxing authorities could get access to information about Swiss bank accounts. Soon, however, there could be virtually no obstacles or hindrances to finding out all about Swiss accounts and account holders. This is because the United States and Switzerland are expected to enter into a new agreement for the exchange of information in 2017.
If the agreement comes to pass this year, as both the U.S. and Swiss governments are expecting, your offshore accounts are going to be reported to the United States. If you have not complied with your obligations to file an annual Report of Foreign Bank and Financial Accounts (FBARs) or if you have funds you have not paid taxes on, this could be a major problem. You need to contact a Boston international tax attorney for assistance to find out your options.
The U.S. and Switzerland are Going to Start Automatically Exchanging Bank Information
The Secretariat's deputy head of tax in Switzerland announced recently that a new agreement is likely to be reached this year with the United States that will change how information about offshore bank accounts is shared.
Currently, the U.S. and Switzerland are operating under the terms of a Model 2 Intergovernmental agreement that allows for the exchange of bank account information when a request is made. In other words, the U.S. government can ask for information on U.S. affiliated individuals with Swiss accounts, and the Swiss government can ask for information on Swiss affiliated individuals with financial accounts in the United States.
Under the terms of the current agreement, data is exchanged with account holder consent, or data is exchanged when group requests for information are made. This creates the practical limitation of restricting the U.S. taxing authorities to getting only information when it makes a specific request for it.
The 2017 agreement between the U.S. and Switzerland is expected to establish a protocol of automatic reciprocal exchanges of information. If there are U.S. affiliated account holders with Swiss accounts, U.S. authorities will automatically be given their information from the Swiss, and vice versa. This means there will effectively be no more option at all for ever having undeclared offshore accounts in Switzerland.
If you have not been in full compliance with reporting your Swiss bank account information to the U.S., you could face financial penalties and possibly even criminal penalties when the U.S. finds you have not followed the rules. You should contact attorney Kevin Thorn as soon as you can to learn about options available to you for trying to protect yourself and to find out what your obligations are going forward.