The U.S. Department of Justice
(“DOJ“) and the Swiss Federal Department of Finance have entered into an
agreement that essentially ends Swiss bank secrecy and the renown of
Switzerland as a tax haven (the “PFSB“).
The PFSB is monumental because it:
1.
Applies
not just to American taxpayers but also to foreigners and foreign entities who
maintain Swiss bank accounts if they are U.S. tax obliged persons under FATCA;
2.
Requires
the disclosure of essentially every penny transferred in and out of closed
Swiss bank accounts over the last five years by persons and entities who are
caught by the PFSB, wherever situated. As a result, U.S. law enforcement
will be able to follow the flow of funds to pursue tax evasion by learning from
where, and to where, funds were transferred; and
3.
Requires
the disclosure of professionals affiliated with the bank accounts or who acted
as intermediaries in respect of the accounts.
By virtue of its reference to the
U.S. Foreign
Account Tax Compliance Act, 124 Stat. 97-117 (“FATCA“), the PFSB
applies not just to American natural and legal persons but also to foreigners
and foreign legal persons in the same circumstances in which FATCA applies
(“U.S. Tax Obliged Persons"). Due to its breadth, FATCA impacts
virtually all non-U.S. entities, directly or indirectly, receiving most types
of U.S. source income, including gross proceeds from the sale or disposition of
U.S. property which can produce interest or dividends.
Lawyers representing 73 of the
banks have sent a letter to the US DoJ complaining that the latest version
of the amnesty terms, circulated on September 22, 2014, includes new demands
that were not in the original agreement.
Participating banks were required
to cooperate fully with any other domestic or foreign law enforcement
agency in any investigation, and to 'share material with governments
other than the US.
It also insists that banks must
disclose information about their parent companies.
The banks' letter of protest says
these terms go beyond what they anticipated when signing up, and urges that they
are withdrawn. The requirement to cooperate with foreign governments 'turns a
program specifically focused on US tax issues into a global cooperation
agreement without any safeguards or guarantees of appropriate consideration of
the banks' cooperation', according to the 11-page letter, which is signed by 18
law firms representing the banks.
Swiss banks in a U.S. Justice Department self-reporting program for undeclared
American accounts have won a concession that indicates the process is moving
forward after an earlier impasse, according to a document reviewed by The Wall Street Journal.
Now a new, revised agreement does
not include the previous language about granting the Justice Department the
right to share data with foreign authorities, or language requiring cooperation
with foreign law enforcement. In addition, the revised version sets a term of
four years for the banks to fulfil obligations under the program, whereas the
prior version left the term indefinite.
The new, revised model agreement has
been sent to banks in the program in recent weeks, according to people familiar
with the matter.
They may get a modicum of relief, but the landscape of global transparency and
disclosure isn’t likely to materially change.
Have
Un-Reported Income From an Offshore Bank?
Contact the Tax Lawyers at
Marini
& Associates, P.A.
for
a FREE Tax Consultation Contact US at
or
Toll Free at 888-8TaxAid (888 882-9243)
The U.S. Department of Justice (“DOJ“)
and the Swiss Federal Department of Finance have entered into an agreement
that essentially ends Swiss bank secrecy and the renown of Switzerland as
a tax haven (the “PFSB“).
The PFSB is monumental because it:
- 1.Applies not just to American taxpayers but also to
foreigners and foreign entities who maintain Swiss bank accounts if they
are U.S. tax obliged persons under FATCA;
-
- 2.Requires the disclosure of essentially every penny
transferred in and out of closed Swiss bank accounts over the last five
years by persons and entities who are caught by the PFSB, wherever
situated. As a result, U.S. law enforcement will be able to follow the
flow of funds to pursue tax evasion by learning from where, and to where,
funds were transferred; and
-
- 3.Requires the disclosure of professionals affiliated
with the bank accounts or who acted as intermediaries in respect of the
accounts.
By virtue of its reference to the
U.S. Foreign
Account Tax Compliance Act, 124 Stat. 97-117 (“FATCA“), the PFSB
applies not just to American natural and legal persons but also to foreigners
and foreign legal persons in the same circumstances in which FATCA applies
(“U.S. Tax Obliged Persons"). Due to its breadth, FATCA impacts
virtually all non-U.S. entities, directly or indirectly, receiving most types
of U.S. source income, including gross proceeds from the sale or disposition of
U.S. property which can produce interest or dividends.
Lawyers representing 73 of the
banks have sent a letter to the US DoJ complaining that the latest version
of the amnesty terms, circulated on September 22, 2014, includes new demands
that were not in the original agreement.
· Participating banks are now
required to 'cooperate fully with any other domestic or foreign law
enforcement agency in any investigation, and to 'share material with governments
other than the US.
· It also insists that banks must
disclose information about their parent companies.
The banks' letter of protest says
these terms go beyond what they anticipated when signing up, and urges that
they are withdrawn. The requirement to cooperate with foreign governments
'turns a program specifically focused on US tax issues into a global
cooperation agreement without any safeguards or guarantees of appropriate
consideration of the banks' cooperation', according to the 11-page letter,
which is signed by 18 law firms representing the banks.
Swiss banks in a U.S. Justice Department self-reporting program for undeclared
American accounts have won a concession that indicates the process is moving
forward after an earlier impasse, according to a document reviewed by The Wall Street Journal.
Now a new, revised agreement does
not include the previous language about granting the Justice Department the
right to share data with foreign authorities, or language requiring cooperation
with foreign law enforcement. In addition, the revised version sets a term of
four years for the banks to fulfil obligations under the program, whereas the
prior version left the term indefinite.
The new, revised model agreement has
been sent to banks in the program in recent weeks, according to people familiar
with the matter.
They may get a modicum of relief, but the landscape of global transparency and
disclosure isn’t likely to materially change.
Have
Un-Reported Income From an Offshore Bank?
Value
Your Freedom?
Taxpayers Who Wish to Take Advantage of
the
Current OVDP Must Act Quickly!
Contact the Tax Lawyers at
Marini
& Associates, P.A.
for
a FREE Tax Consultation Contact US at
or
Toll Free at 888-8TaxAid (888 882-9243)
888 882-9243).
