The Swiss bank Credit Suisse has settled with the U.S. government to the tune of $2.6 billion, pleading guilty to criminal conspiracy charges. In a scheme spanning decades, according to federal investigators, Credit Suisse helped wealthy American clients evade US taxes. Credit Suisse is the largest financial institution to enter a guilty plea in 20 years.
This marks a further step forward in the continuing U.S. crackdown on undisclosed offshore assets and similar tax evasion schemes. The settlement reached with Credit Suisse includes an agreement to provide information to federal investigators. FATCA, a law passed in 2010, provides for foreign governments and/or foreign financial institutions to share information with the U.S. government about American depositors, with an aim toward finding previously undisclosed offshore assets and foreign accounts. While investigations continue into Swiss and other financial institutions over charges similar to those brought against Credit Suisse, several countries have signed FATCA agreements with the U.S. We can expect more settlements from other banks in the future and for more nations to sign FATCA agreements.
The good news for taxpayers with previously undisclosed offshore accounts and assets is the continued availability of the IRS’s Offshore Voluntary Disclosure Program (OVDP). The OVDP offers protection from criminal prosecution and a reduction in penalties for taxpayers who “come clean” about their foreign asset and accounts. Although the program itself has no deadline, the IRS has the ability to change the terms (for example, increasing the penalties paid) at any time. Moreover, once the IRS has begun investigation into a taxpayer’s accounts or assets, they are no longer eligible for the OVDP. Investigation begins, it should be noted, before the taxpayer is notified of the fact. And with new FATCA agreements being signed and banks like Credit Suisse settling with U.S. investigators, taxpayers with undisclosed offshore accounts or foreign assets would be well advised to review the options available to them, including participation in the OVDP.
Horowitz Law Offices has represented numerous clients before the IRS in connection OVDP filings and other tax matters. You are welcome to contact us at (312) 787-5533 or email@example.com