tag:blogger.com,1999:blog-1519969502186924526.post1946912885158617628..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Swiss Banks' Requests to U.S. Depositors for Waivers and Proof of Entry Into OVDP (6/11/14)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-1519969502186924526.post-60065118735249606902014-06-15T08:17:32.647-05:002014-06-15T08:17:32.647-05:00I have heard vague suggestions that attempting to ...I have heard vague suggestions that attempting to secure compensation of this kind from a Swiss bank may resemble extortion or may otherwise be improper, but of course this was from the lawyer for a Swiss bank, and he did not offer any specifics. If there is a real legal issue here, someone ought to be able to articulate it; but thus far I have not heard any such articulation.<br /><br /><br />One thought that comes to mind is that it could conceivably be considered akin to selling a $2 bottle of water for $1,000,000 in the desert. There are, of course, important distinctions between the scenarios, but to address that potential argument I think I prefer disregarding what penalty the bank may pay and focussing on the fact that my client incurred costs (including attorneys' fees, accounting fees, and penalties) in securing his closing agreement. If the bank wants to benefit from that closing agreement they can agree to split the cost.Michael J. Millernoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-41599836988203280312014-06-13T11:53:06.637-05:002014-06-13T11:53:06.637-05:00Thanks Jack. I am obviously behind in my reading....Thanks Jack. I am obviously behind in my reading. I will got back and have a look at what you had to say. Appreciate the alert.Just_Me_Alsonoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-65637299037803666902014-06-13T09:35:57.563-05:002014-06-13T09:35:57.563-05:00I posted a blog expanding on Dunn's Forbes blo...I posted a blog expanding on Dunn's Forbes blog. My blog expansion is Reminder: Category 2 Banks Will Serve Up Their U.S. Depositors (6/11/14), here: <br /><br />http://www.federaltaxcrimes.blogspot.com/2014/06/reminder-category-2-banks-will-serve-up.html<br /><br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-29822527186709563142014-06-13T09:16:35.603-05:002014-06-13T09:16:35.603-05:00Jack..
I have little to contribute in the way of ...Jack..<br /><br />I have little to contribute in the way of knowledgeable comment, other than to point you to a posting at Forbes the other day which I found interesting... It was by Stephen Dunn<br /><br />Title: Beware Of Swiss Banks Urging Offshore Voluntary Disclosure To IRS<br /><br />http://onforb.es/1kSYjRq<br /><br /><br /><br />Just throwing this into the mix of discussion, and what he has apparently been advising one of his clients.Just_Me_Alsonoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-73667212580522731672014-06-11T16:26:09.394-05:002014-06-11T16:26:09.394-05:00With regards to using the word "Nötigung"...With regards to using the word "Nötigung" I am surprised that legal counsel of the swiss bank went this direction in describing your motives . This is NOT the legal standard according to the "Strafgesetzbuch" Art.180 and not appropriate here. The "Tatbestand der Nötigung" or the offence of coercion does only exist with regards to...."Androhung ernstlicher Nachteile oder durch andere Beschränkung seiner Handlungsfreiheit nötigt etwas zu tun, zu unterlassen oder zu dulden......" -Threat of serious harm or other restriction of his freedom of action compels to do something or to refrain or to tolerate ......<br />http://www.gesetze.ch/sr/311.0/311.0_019.htm<br />http://www.ur.ch/dl.php/de/0dv6x-d3bp5v/doc_rechtsfall_id_389.pdf<br /><br />In the case of a transfer of personal data outside of Switzerland, special requirements need to be met and, depending on the circumstances,the Swiss Federal Data Protection and Information Commissioner must be informed before the transfer is made. Most Swiss cantons have enacted their own data protection laws regulating the processing of personal data by cantonal and municipal bodies. The DPA applies to the processing of personal data by private persons and federal government agencies. Unlike the data protection legislation of many other countries, the DPA protects both personal data pertaining to natural persons and legal entities.<br />The Swiss Federal Data Protection and Information Commissioner in particular supervises compliance of the federal government agencies with the DPA, provides advice to private persons on data protection, conducts investigations and makes recommendations concerning data protection practices.<br />http://www.dataprotection.ch/en/home.asp<br />http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1020&context=bjilGlobalCapitalismnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-31913711792051980482014-06-11T16:05:31.507-05:002014-06-11T16:05:31.507-05:00You pose an interesting question as to whether an ...You pose an interesting question as to whether an "old" voluntary disclosure, prior to receipt of any letter from the bank, suffices for the bank to avoid a penalty. I have been told by several persons (including someone at one of the Swiss banks whose job is to collect the necessary documents to allow that bank to avoid penalties) that it does suffice, but it's not clear to me why that is, or in which category of penalty exception it falls (the category being relevant because the banks have different extensions for different categories of penalty exceptions). Perhaps Jack or others who are in the know can chime in.Michael J. Millernoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-19580951015058121972014-06-11T15:40:25.620-05:002014-06-11T15:40:25.620-05:00We are talking 100+ Category 2 banks, versus two b...We are talking 100+ Category 2 banks, versus two banks (UBS and CS) so I expect it to take a while. Only around 3,000 UBS customers and 300 CS customers met the criteria (account size, etc.) for disclosure. These are the largest two Swiss banks. Many of the Category 2 banks are regional and small, and not too attractive to a US resident who speaks only English. And I would expect that the vast majority of those banks did not have bankers travel to the US, so my guess is that if the disclosure criteria are similar, the number of accounts disclosed by those 100 banks combined would be even less than 5K. The big unknown is what the disclosure criteria will be.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-8533663684254916632014-06-11T14:54:02.313-05:002014-06-11T14:54:02.313-05:00Anonymous,
Read this post that Jack discussed in ...Anonymous,<br /><br />Read this post that Jack discussed in an earlier post: http://www.forbes.com/sites/stephendunn/2014/06/08/beware-of-swiss-banks-urging-ovdp/<br /><br />The above article is calling into question whether the Category 2 bank is technically even allowed to even disclose the information. Most Swiss bank accounts were closed down in 2009 and the banks are now using a clause in the FATCA IGA to release the information...<br /><br />Granted, we are discussing the Swiss and anything goes to save the banks, but (in theory) it is not even legal under "Swiss" law.John Auditnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-34270354551447228612014-06-11T14:26:07.162-05:002014-06-11T14:26:07.162-05:00Under the UBS treaty request, only accounts meetin...Under the UBS treaty request, only accounts meeting certain criteria were reported, for example personal accounts with high balance over $1 million, and entity accounts over $250K. (Actually the criteria were more complicated than that, including (if my memory is correct) not reporting accounts of US persons who had been legal residents of Switzerland the entire 2003-2008 period.) <br /><br />In the case of CS, I seem to recall that the initial request for entity accounts over $250K was rejected, but I don't know whether or how it may have been modified and resubmitted.<br /><br />There is no telling of course of what the treaty request criteria might be for other banks, but it would seem likely that minnow accounts might not get reported through a treaty request (where the line would be drawn is something nobody knows.) Also, given the fact that it may take a year or two for the IRS to process OVDI disclosures when there have been 30,000 disclosures over the past five years, it seems unlikely that the IRS would dedicate the resources to pursue most minnows.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-50035333408996409462014-06-11T14:19:54.342-05:002014-06-11T14:19:54.342-05:00Jack,
I have read that the Category 2 process wil...Jack,<br /><br />I have read that the Category 2 process will be a hand of anonymized data to the DOJ and then treaty requests will come after the data handovers.<br /><br />Do you (or anyone else) have an idea how long the data handover, review, and treaty requests will take? <br /><br />It will be interesting to see how much data they actually get. 100K customers? 10K customers?John Auditnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-30376670033517905992014-06-11T13:25:00.401-05:002014-06-11T13:25:00.401-05:00gottaloveUStax1:
I am not sufficiently experience...gottaloveUStax1:<br /><br />I am not sufficiently experience in the sourcing rules, but I do know that the payment would be taxed under U.S. law, Perhaps, perhaps, the U.S. depositor could claim some cost offsets (certainly the cost of negotiating the payment and perhaps even any costs such as professional fees in OVDP that might be attributed to the production of the income). But, the starting point is that the gross payment would be reported somewhere, directly or indirectly, on the U.S. tax return.<br /><br />I think your way of looking at it might be right. Focus on the payor's -- the bank's -- side. Is it obstruction of justice for them to seek the OVDP documents under some guise other than that they need those documents to avoid a penalty? Isn't the bank misleading the U.S. depositor? Isn't it the bank that is obstructing justice, at least in a common lay sense by withholding key information from the person to whom its fiduciary relationship has never been severed (even if the depositor closed out the account)? <br /><br />There are many facets of this that could come back to haunt the depositor and the banks. But I don't represent the banks. I think that, at least in the instance cited in the blog, the attorney representing the banks have overstepped proper boundaries. But that is just my opinion, and my opinion has been proved wrong before. On many occasions.<br /><br />Thanks,<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-945320617717419912014-06-11T13:16:25.125-05:002014-06-11T13:16:25.125-05:00I don't think that is the way to look at it. I...I don't think that is the way to look at it. I think the coercion would be for them to do something illegal (in their opinion, obstruction of justice) to obtain something from you. Another question: presumably that payment would be taxed? Would it be Swiss or US source income?gottaloveUStax1noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-14534945401795590072014-06-11T13:15:24.438-05:002014-06-11T13:15:24.438-05:00Thanks gottaloveUStax1,
I will try to work throu...Thanks gottaloveUStax1,<br /><br /><br />I will try to work through the Code Sections and their interpretations at least sufficiently to determine whether that is a real issue or not.<br /><br /><br />Thanks again for your comments.<br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-1317559591407816862014-06-11T13:13:41.625-05:002014-06-11T13:13:41.625-05:00Can you help me understand why a person doing some...Can you help me understand why a person doing something that the law permits him to do (withhold his private documents) or, more particularly, for charging something to disclose his private documents is coercion?<br /><br />By analogy, I have just found a the largest diamond ever, is it coercion to offer it for sale for the largest price ever for a diamond? The buyer does not have to buy. The seller does not have to sell. Nobody is coerced and will enter the commercial transaction, if at all, based each parties respective legal bargaining positions.<br /><br />Does Swiss law really prohibit the banks from paying for the release of private documents?<br /><br />Thanks,<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-85384557336007762402014-06-11T12:11:00.060-05:002014-06-11T12:11:00.060-05:00the legal term is Nötigung and means duress,coerci...the legal term is Nötigung and means duress,coercionGlobalCapitalismnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-15214565284447063262014-06-11T12:08:24.122-05:002014-06-11T12:08:24.122-05:00I have no experience in this space, but the thing ...I have no experience in this space, but the thing that comes to mind first is witness tampering. And this is theoretical, not accusatory and not based on any real knowledge of criminal law but I guess an aggressive prosecutor could say that the Swiss bank provision of information somehow places them within the cope of 18 USC 1512, then I guess the question is does the request for compensation satisfy any of (b), (c) or (d) of that section. In particular, (d)(2) "Whoever intentionally harasses another person and thereby hinders, delays, prevents, or dissuades any person from reporting to a law enforcement officer or judge of the United States the commission or possible commission of a Federal offense or a violation of conditions of probation [supervised release,,parole, or release pending judicial proceedings." Seems a stretch to me, but then again, who knows. If it were to be determined a crime, then presumably the "noetigung" (which generally means compulsion/coercion to do something) element would be that you are somehow coercing them to commit a crime.gottaloveUStax1noreply@blogger.com