Swiss Bankers Face Catch-22 with Foreign Disclosure Agreements – Los Angeles Income Tax Planning & Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on July 24, 2014

For generations, Swiss banks have been known around the world for their strict tradition of client confidentiality and privacy. However, recent international agreements aiming to fight tax evasion and end banking secrecy, such as Switzerland’s 2012 agreement with the Organization for Economic Cooperation and Development (OECD) or the Foreign Account Tax Compliance Act (FATCA), have steadily begun to erode Swiss banks’ ability to maintain those traditions of secrecy. Although seen as a victory among foreign tax agencies like the American Internal Revenue Service (IRS), these agreements have placed midlevel Swiss bankers in a very uncomfortable position.

While successive international agreements have chipped away at Switzerland’s banking secrecy, domestic laws on the books since 1934 make violating client confidentiality a serious crime. Swiss bankers who decide to comply with these international agreements and cooperate with foreign governments leave themselves subject to home raids, fines for secrecy violations and industrial espionage, and stigmatization from their colleagues and friends. With such punishments awaiting them, it is no wonder that so many bankers refuse cooperation, opting to stay in Switzerland for the rest of their lives in legal and personal limbo simply to avoid extradition.

The US Department of Justice (DOJ) doesn’t take kindly to uncooperative bankers. Indeed, the DOJ has been proactively targeting Swiss bankers and financial advisors. The Department has already charged more than 35 Swiss Bankers and 25 financial advisers with misconduct for facilitating tax evasion, and six of those have already been charged or pleaded guilty.

As the next wave of Swiss banks turns over the names and accountholder information of Americans with undisclosed accounts to the US government for investigation, a backlash is expected. The Swiss People’s Party has already collected nearly all of the 100,000 signatures it needs for a voter referendum to enshrine corporate secrecy in the constitution.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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