Saturday, July 11, 2015

US Tax Program Site With Information on Swiss Banks Joining US DOJ Swiss Bank Program (7/11/15)

Andre Weiss, a commenter on this blog, pointed out the following web site:  US Tax Program, here.  It offers descriptions of the U.S. DOJ Swiss Bank Program and key data in spreadsheet format.  I have checked the data against my spreadsheet and have incorporated information into my spreadsheet from this site.  One thing I did not check was whether my spreadsheet includes banks this site does not.  Perhaps I will do that when I have time.  In the meantime, based on my spot checking, it is a site that readers of this blog may find helpful.

Thanks to Andre.


  1. Mr. A,

    I really do understand your position and can empathize with it. Empathy is not the same as agreement. I am not a tax policy guy and simply do not know where I would come out on the issue if I were the decision maker between CBT and RBT. I understand both sides of the argument. (By the way, I think the argument for CBT is more nuanced than is framed in most of these comments.)

    I will say, however, that in making arguments where the goal is to persuade people to action in our system, the more persuasive arguments avoid rhetoric such as calling criminals the President and Senators who disagree with you as to the merits of a CBT and its administrative implements. I think you are wrong if you think that is helping the case I presume you want to make.

    Jack Townsend

  2. While I understand that the blog does not focus on tax policy, I think it is a fair question as to whether the IRS is using its discretion wisely, both in terms of its interpretation and enforcement of the laws that are passed by Congress. In certain areas, eg., PFICs and foreign currency gains on property/mortgage transactions (two areas that often elicit anger from expats), there is probably little the IRS could do. In the cases of FBAR and FATCA, however, a lot of the criticism is fair, especially as it relates to immigrants and expats. With a little bit of effort, the IRS could have reached out to a wide variety of taxpayers to alert them of their filing obligations (for example, an automated response to someone filing taxes from a foreign address to give notification of the FBAR rules would not have been either difficult or costly. From my understanding, that is not something the IRS ever did.) they could have introduced the current streamlined program way back in 2009 (at the same time as the enforcement effort) and FATCA could have been accompanied by same country account exemptions. And so on.
    From a tax policy perspective, I agree the hyperbolic focus on FATCA is not helpful. The argument should really be around adopting CBT or making RBT more amenable to expats. FATCA is an enforcement effort; repealing it would not solve the problem of non-compliance with rules/laws that are inappropriate and unfair.

  3. I don't think that any American who has never lived outside the USA on a long term basis is able to truly appreciate all the negative consequences of CBT. First hand experience is critical (unless one is so wealthy that it simply does not matter). We all know that theoretical considerations often do not correlate with cold hard reality. Please read all the submissions and personal stories that people sent to the SFC. The truth of how wrong CBT is lies in their words.

    I absolutely agree with your last paragraph. My letter to the Senators on the SFC was respectful and focused on the injustice of FATCA and CBT.
    I certainly did not call them criminals - I am just telling you my true feelings. How else can one describe the US government trying to take money on which it has no legitimate claim?

    (In my previous comment I incorrectly called Charles Rangel a Senator; I forgot to note that he is a member of the House of Representatives)

  4. Mr Townsend:

    First, I would like to thank you for maintaining this valuable and interesting blog over the years. It has been and continues to be a valuable resource and forum.

    Second, you write in the above comment:

    "(By the way, I think the argument for CBT is more nuanced than is framed in most of these comments.)"

    I would be grateful for your thoughts on what you think the argument for CBT actually is.

    Thanks again

  5. Excellent points, Andre.
    I would also add that:
    1) RBT would not be any more difficult to enforce (from people falsely claiming foreign residence) than the current exemption on foreign "earned" (salary and such) income. It seems the law could be changed so that those who meet the current tests for the foreign earned income exclusion could be exempted from US taxation and FBAR filing requirements.
    2) The vast majority of people whom the IRS is penalizing through OVDI, Streamlined etc. are people who corrected past nonreporting voluntarily and of their own initiative. The IRS does not apply penalties to those who correct past tax nonreporting in this manner (only back taxes and interest.) Yet there is usually a disproportionately high FBAR penalty, even though the back taxes and interest are paid through amended returns.

  6. Mr. Townsend if I may, you write:

    "For me alone (and keep in mind that I am not a tax policy guy), I have
    difficulty understanding the precise focus of the perceived problem."

    Before, I attempt answer you, may I remind you of the problems that Homeland Americans have in both tax and reporting requirements with respect to anything offshore or foreign.

    The general problem for Americans abroad is twofold:

    First, Americans abroad are treated as U.S. residents when they are clearly not.

    Second, the assets of Americans abroad in their countries of residence are treated as "foreign" to the United States even though they are not foreign but local to the individual.

    This creates a situation where Americans abroad are required to live exactly as a Homeland American would. So, what you say? Well, it makes investing and retirement planning very difficult. It deprives Americans abroad from the tax benefits extended to residents of their country of residence. It makes U.S. tax compliance expensive and somewhere between "difficult" and "impossible".

    The irony is that it is ONLY U.S. tax compliant Americans abroad who have these problems.

    In any case, I thank you for your comments. But, I would like to encourage you to really take the time to understand how these laws effect Americans abroad and why most attempts at U.S. tax compliance will lead to the conclusion that renouncing U.S. citizenship is the only viable option.

  7. Andre

    1. If the FBAR penalty does not survive death, the logically the assets going to the heir would not be tainted.

    2. But, if the FBAR penalty survives death, then I would think that one of various transferee-type liabilities might apply. I am familiar with how these work in the case of tax liabiilties, but not in the case of FBAR liabilities. There is a Federal Debt Collection Practices Act that, I believe, permits remedies similar to state fraudulent conveyance acts. But, rather than speculate about its application (and I certainly don't have time to research the issue now), I would just speculate that the IRS might be able to "follow the money."

    Jack Townsend

  8. Thanks Jack.
    So the first question is whether the FBAR penalty survives death which, I believe, you are researching. Please let us know what your research reveals when you have time to look into it.

  9. Thanks, Andre.
    Does anyone know the source for this information? Public announcements by the banks? FOIA or similar release from the Swiss government? The fact that numberof US accounts and total value thereof is listed, makes me think thatthere may be an official source.

    Also, I noticed that some settlement agreements (maybe all) say that the bank will cooperate with DOJ in preparing a John Doe request (or treaty request; I think these are synonymous.) I'm not clear on why such a request would have to be different for each bank, or why such a request could not be made for ALL banks, regardless of their category. If a person has accounts with similar balances and activities in bank X and bank Y, does it make a difference what bank it's in?

  10. TAS Objectives for 2016 report, normally release in June, has just been released. I haven't read it yet.

  11. I found the answer to one of my questions. The source of the info is "The information is updated on an ongoing basis and subject to change. Sources of information are the Swiss National Bank, Swiss Financial Market Supervisory Authority - FINMA, press releases from financial institutions and media coverage."

  12. That's my reading (assuming, of course, that the individual is not a
    covered expatriate under the net worth test or by reason of a failure to
    certify tax compliance for the applicable five-year period).

  13. The case of United States v. Chabot is another example of where the rights of the individual are trumped by the rights of the state. The rights of the individual are continually being eroded.
    But the obvious question(to me) is why doesn't the government simply do a treaty request. They know the bank and the name of the account holder. That approach seems faster and easier than going through a bunch of appeals. The IRS/DOJ are continuously reminding us that they have done or will do many treaty requests to find any remaining undeclared accounts.
    Does Jack or anybody else know why the information hasn't been obtained by a treaty request?

  14. Jack, would it be possible for you to have a blog entry on the latest TAS report rleased July 2015? I would like to comment on it. And thanks for the explanation of treaty requets vs. John Doe summons.

  15. Over the past ten years, there has been considerable consolidation of Swiss banks. I wonder how whether there is any consideration given in determining bank penalties, if a bnak simply acquired another bank which had undeclared US clients (as opposed to the acquiring bank opening such accounts.)

  16. I am not aware of any consideration, but I think the sucessor in the consolidation would succeed to the liabilities and potential liabilities of the acquired company (bank) and thus would have to join as category 2 and pay the formula penalty. But that is extrapolating from US consolidation principles.

    If anyone else can respond based on Swiss law and its intersection with US law., please do so.

    Jack Townsennd

  17. I will try to do a blog entry on that by the weekend. In the alternative, if you wanted to draft a blog entry that meets my standards for this blog, I could post it as a guest blog either attributed you by name or as an anonymous guest blog entry.

    Jack Townsend


Please make sure that your comment is relevant to the blog entry. For those regular commenters on the blog who otherwise do not want to identify by name, readers would find it helpful if you would choose a unique anonymous indentifier other than just Anonymous. This will help readers identify other comments from a trusted source, so to speak.