The Tax Times: Is Their Benefit To Responding To Your Swiss Bank's Request For Confirmation Of Tax Compliance?

Friday, June 20, 2014

Is Their Benefit To Responding To Your Swiss Bank's Request For Confirmation Of Tax Compliance?

On Tuesday, June 17, 2014 we originally posted "Did You Receive a Swiss Bank Letter Asking You to Confirm That You Are Compliant with US Tax Law?" where we discussed that numerous clients of our firm have requested advice on how to respond to letters from their Swiss Bankers asking them to confirm that they are US tax compliance.

We advise taxpayers not to be fooled into thinking that answering these letters or providing this information will somehow benefit you the client! Your account will be turned over to the U.S. Treasury Department, as an account associated with a US beneficiary, whether you respond to this banks request or not!

This is solely for the bank's benefit, so that they can categorize your account as a "Tax Compliant Account" which will then not be subject to the 20% penalty imposed by the U.S. Treasury Department against your Swiss Banker.

However having reflected on this blog post; there is one instance where a US individual is otherwise compliant, it might not be a bad idea to comply with the Swiss banks request, so they can classify this particular account as US tax compliant.

This may have the additional benefit of possibly not resulting in this particular Swiss bank account being turned over to the US; since it will be classified by the Swiss Bank as "US tax compliant". But there's no guarantee of this result.

The only other deadline the US taxpayers with previously undeclared income from their foreign bank should consider, is the deadline to make a voluntary disclosure in the current Offshore Voluntary Disclosure Program (OVDP), which sets a limit to the penalties imposed on them by the Internal Revenue Service (IRS) for failing to declare foreign assets and earnings.

Once the Swiss banks disclosed an account holder's name to the IRS, which they must do by no later than June 30, 2014; the OVDP option is no longer available to that US Taxpayer Account Holder.

Taxpayers who wish to take advantage of the OVDP
must act quickly!

The US Can Use Swiss Data for Law Enforcement Actions!

The new agreement makes clear that “personal data provided by the Swiss banks… will be used and disclosed only for purposes of law enforcement (which may include regulatory action) in the United States or as otherwise permitted by US law.”

Have Un-Reported Income From a Swiss Bank?

Value Your Freedom?