The Swiss Federal Tax Authority (SFTA) has ordered Credit Suisse to submit offshore bank account information in response to an IRS request for assistance, according to a New York Times article. Credit Suisse has notified some of its offshore account holders by letter about the order. Apparently the order is not directly related to the IRS negotiations going on with approximately 11 Swiss banks to turnover the names of all of their U.S. clients. Instead, it appears from the New York Times article that these requests relate to individuals who the IRS already has reason to believe have foreign bank accounts. If that is the case then it may be too late for these individuals to file a voluntary disclosure with the IRS to attempt to escape criminal penalties. Still in some cases a late voluntary disclosure is better than no disclosure. Without a detailed examination of all of the facts and circumstances there is no way of advising someone as to the best path to take.
Although account holders may appeal the SFTA decision, the act of doing so requires that they notify the U.S. government that an appeal has been filed. Failure to do so could result in separate penalties. Sort of a catch twenty two.
The SFTA order to Credit Suisse highlights the noose that the IRS is attempting to tighten around the neck of offshore account holders who failed to file their Foreign Bank Account Reports (FBAR) on TDF 90-22.1. The civil penalty for willfully failing to file the FBAR can be up to 50% of the account balance so even if no jail time ensues it is still a very expensive proposition.
If you have a Credit Suisse account, or any foreign financial account, and would like a confidential consultation with the tax attorneys at Brager Tax Law Group, A P.C., call 800-380-Tax Litigator to schedule an appointment.