The U.S. Announces Penalty Rates for Swiss Banks Involved in Tax Probe


The U.S. Announces Penalty Rates for Swiss Banks Involved in Tax Probe

by Joseph M. Donegan on September 16, 2013

The Department of Justice unveiled a new program designed to both encourage Swiss banks to cooperate with U.S. investigations into tax evasion and outline potential penalties these financial institutions may face for hindering these tax law cases.

U.S. authorities announced that Swiss banks seeking to avoid prosecution for facilitating tax evasion through the use of secret accounts held by Americans may still face penalties of up to 50 percent of the asset value. According to the agreement, participating banks must agree to a 20 percent penalty of the value of undisclosed U.S. accounts held by the bank on August 1, 2008. The penalty will increase to 30 percent for secret accounts opened after that date but before the end of February 2009. Any secret accounts opened after February 2009 will incur the maximum 50 percent fee.

Although the deal will not apply to those 14 Swiss institutions already under investigation, authorities will allow other institutions to avoid criminal probes if they agree to pay the penalties and disclose information on U.S. clients.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Joseph Donegan, Scarinci Hollenbeck | Attorney Advertising

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