The IRS is seeking information with regard to accounts of certain U.S. persons (as beneficial owners) owned through a domiciliary company (a "DC") that have been maintained with Bank Julius Baer & Co. Ltd. ("Bank Julius Baer" or "the Bank") In Switzerland- as applicable in any given case in the ''IRS Treaty Request"- at any time during the period from January 1, 2002, to December 31, 2012.
These accounts include such held by a domiciliary company (a "DC account") with a U.S. beneficial owner that included U.S. securities but for which the Bank has no record of the timely filling of accurate Forms 1099 naming the account's U.S. beneficial owners and reporting to the IRS all payments made to such U.S. beneficial owners and for which there is evidence that the U.S. beneficial owner exercised control over the account in violation of the DC's corporate governance.One Swiss attorney is quoted as follows (Giles Broom, Julius Baer Tells American Clients of U.S. Information Request (BloombergBusinessweek 5/28/13), here.)
“The Swiss government is taking a broad interpretation of the treaty to allow the handover of data in cases involving offshore structures,” said Milan Patel, a former IRS trial attorney who is now a partner at Zurich-based law firm Anaford AG. “The banks seem willing to oblige to show they are cooperating with the U.S. once the Swiss government approves the turnover to avoid any violation under Swiss banking secrecy.”Since, as noted in the article, Julius Baer is only one of at least 14 financial firms being investigated, I think we can expect to see more such requests. It is interesting that, at this time, the requests are only for accounts that use a "domiciliary company." Directly owned accounts are not within the scope of the treaty request. Don't know precisely what to make of that without more speculation than I am willing to make.