tag:blogger.com,1999:blog-1519969502186924526.post1523457182180294113..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Swiss Bank Hype and Over-Hype (12/22/13)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger36125tag:blogger.com,1999:blog-1519969502186924526.post-75645048369463334552014-01-15T06:27:50.063-06:002014-01-15T06:27:50.063-06:00..... CH was the top investor in the US in 2010........... CH was the top investor in the US in 2010......<br />you will find already many finacial planers and CPAs - one of them my friend Phil Hodgen advocating to avoid investing in the US and not just for duals and green cardholders .UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-22063580629800283982014-01-15T06:17:34.522-06:002014-01-15T06:17:34.522-06:00Jack you mention here that some of your clients di...Jack you mention here that some of your clients did already provide proof of US compliance to their Swiss bank. You speak of a redacted US tax return and several other ways. Could you please elaborate on these "other ways" .UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-30549111024046872902014-01-15T06:07:15.608-06:002014-01-15T06:07:15.608-06:00yes you are correct about $C and it seems that man...yes you are correct about $C and it seems that many people have forgotten that alreadyUStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-32683378882427289012014-01-06T12:05:51.028-06:002014-01-06T12:05:51.028-06:00Many customers may have moved or died and the bank...Many customers may have moved or died and the bank may not be able to contact former customers.Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-13041692620941020282014-01-06T12:03:41.671-06:002014-01-06T12:03:41.671-06:00Jack just as you have been perhaps the most vocal ...Jack just as you have been perhaps the most vocal in saying that OVDP isn't for everyone and QD/FC may be a viable alternative for many, you seem to be the lone voice telling banks that they sahould not all go into Category 2. However just as many lawyers have scared people into OVDP, they may be scaring banks into Category 2.Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-80367214993852367032014-01-06T11:57:09.852-06:002014-01-06T11:57:09.852-06:00DOJ said " includes only those accounts that ...DOJ said " includes only those accounts that were reported subsequent to notification by the bank. "<br />Thios would mean that if an account holder joined OVDP on his own after 2009 but prior to being prodded to do so by the bank then the bank would still pay a fine.Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-8671909447078532902013-12-28T01:08:40.941-06:002013-12-28T01:08:40.941-06:00So, basically, the US is saying that if a bank bri...So, basically, the US is saying that if a bank bribes the US with enough money, that the US then might not ask for more? Unless the IRS provides banks access to their client data held by the IRS, banks will have no way of knowing who is compliant or not. This means that the program is based on a bribe guess, where the bank as to attempt to figure out how much the US wishes to be bribed with. Somehow, I doubt that the US greed for money can ever be satisfied.SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-20612792679147235472013-12-27T02:48:30.508-06:002013-12-27T02:48:30.508-06:00Take a look at this section from the November 5, 2...Take a look at this section from the November 5, 2013 memorandum from the DOJ clarifying the terms of the bank deal. It seems to greatly limit the penalty reductions available to a bank:<br /><br />Penalty calculation – permitted reductions. The Program allows for the reduction of penalties with respect to three categories of U.S. related accounts. The first category – accounts that are not undeclared – is intended to address issues concerning lines of business that by their nature did not facilitate the evasion of U.S. taxes and reporting requirements. For example, a corporate account that was declared but had U.S. signatories who did not file FBARs is included in the definition of U.S. related accounts under the Program, but may be excluded for the penalty calculation. The second category – accounts that were disclosed by the bank to the Internal Revenue Service – refers only to accounts that were timely disclosed, not accounts that are disclosed under FATCA, as part of the Program, pursuant to treaty requests, as a result of other law enforcement efforts, or similar forms of later disclosure. The third category – accounts as to which the bank notified its account holders of an announced offshore voluntary disclosure program and can establish that its account holder made a voluntary disclosure under that program – includes only those accounts that were reported subsequent to notification by the bank. All forms of voluntary disclosure acceptable to the IRS will meet the voluntary disclosure standard of the Program, including the OVDI/OVDP procedures, the Streamlined Filing Compliance Program, and FBAR compliance under FAQs 9 and 17 of the respective IRS programs. The burden to show the application of penalty reductions rests with the bank. (Program II.H.)Againnoonenoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-34571579776821332542013-12-27T01:43:54.771-06:002013-12-27T01:43:54.771-06:00Tell me one benefit to the US taxpayer for giving ...Tell me one benefit to the US taxpayer for giving its former banker the information requested to reduce the bank's penalty?Againnoonenoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-67471658890136165842013-12-26T20:15:50.356-06:002013-12-26T20:15:50.356-06:00If a US tax-compliant client does not disclose the...If a US tax-compliant client does not disclose their identity, does this mean that the bank will be wrongly penalized for being innocent? What can the US do to ensure that it doesn't profit from crimes forced against the innocent?SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-12111350503219404172013-12-26T20:01:50.373-06:002013-12-26T20:01:50.373-06:00What is proof of tax compliance? Is the IRS sendi...What is proof of tax compliance? Is the IRS sending out certifications of tax compliance that can be shown to banks? <br /><br />Banks often have no way of knowing if their clients are Americans or not and if these Americans filed US tax returns. As such, the US is wrongly pushing innocent banks into category 2.<br /><br />Most Swiss generally figure that the US is reasonable to work with and that business as usual will be quickly resumed. As such, I suspect that US penalities against innocent banks will generate one heck of a lot of anti-American hatred which will likely harm trade with the US for decades into the future.SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-39618652496475094762013-12-26T15:35:03.521-06:002013-12-26T15:35:03.521-06:00The banks are asking the U.S. depositors for proof...The banks are asking the U.S. depositors for proof of their tax compliance (either on the original filings or by joining the OVDI/OVDP). The banks do have to submit some proof which, I presume, the DOJ can then verify with the IRS consistent with the requirements of the privacy requirements in 26 USC 6103.<br /><br /><br />Now, the question is whether the U.S. depositors will provide proof of their compliance to the Swiss banks (which they need to obtain a penalty reduction). <br /><br /><br />I guess theoretically, if the critical mass of U.S. depositors were U.S. tax compliant on their original returns and the bank can prove that, the bank should not be joining as Category 2 participants.<br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-89803824489799749752013-12-26T12:16:54.499-06:002013-12-26T12:16:54.499-06:00How does a bank know if a client is compliant or n...How does a bank know if a client is compliant or not when the IRS doesn't have the client details? Banks have no way of knowing if a client is compliant with US taxation.SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-45321025843713179832013-12-26T11:08:14.336-06:002013-12-26T11:08:14.336-06:00Citibank wasn't charged a dime when it got cau...Citibank wasn't charged a dime when it got caught helping Argentinians launder money.SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-6668240609018300302013-12-25T05:39:38.555-06:002013-12-25T05:39:38.555-06:00I'm curious whether the tables could possibly ...I'm curious whether the tables could possibly ever be turned? For example, if one or more US banks were found to have actively recruited clients from other countries and encouraged tax evasion vis-à-vis these clients' home countries, could they be prosecuted similarly to how US is pursuing Swiss banks?GS_garbonoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-10103603739607400092013-12-24T14:22:30.409-06:002013-12-24T14:22:30.409-06:00I doubt that some Americans really understand the ...I doubt that some Americans really understand the problems of racism. Some seem to think that the murder of a Semite is justified when one rejects the nation of Palestine in favor of illegal settlement expansions. Thus, others seem to think that it is not racist to generalize against another group of people in a heavily bigoted and hostile manner. So, some walk around accusing all Swiss of being "Nazi bankers" like how the Nazis made similar claims about Jews. Then, there are others who argue that all banks are guilty even though no evidence exists to prove such. Overall, humans are generally the same while the racists attempt to make it seems as if such is not so. Yet, it is the hatred which remains to be the problem.<br /><br /><br />Identifying a group of people in another nation has everything to do with national origin discrimination. It's like pinning a yellow star on Jews so that they will be identified. Nazi Germany would be utterly thrilled if it could be in America's shoes today. It might not pick on the Americans, but the type of problem would be the same.<br /><br /><br />Switzerland got hit first because too many Americans take Hollywood too seriously.SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-81539441835530533932013-12-24T14:10:53.780-06:002013-12-24T14:10:53.780-06:00So, will the US extradite any American who violate...So, will the US extradite any American who violates Swiss law to be complaint with extra-territorial enforcement? I don't recall the US ever extraditing Bush to be charged for crimes of torture.SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-16391927390675111052013-12-24T14:03:13.484-06:002013-12-24T14:03:13.484-06:00The "sad counselor" is the US government...The "sad counselor" is the US government. It is the creator and enforcer of flawed policy which wrongly harms the innocent. Innocent banks are simplying doing what flawed dictation requires them to do. The main question here is how much more criminal the US government will choose to become?<br /><br />Ths US government is pressuring the Swiss government, FINMA and the auditors to force innocent banks into category 2. As such, one can't blame Swiss banks for the US government faults. The US government is the one who is misbehaving with its hands in the cookie jar. No evidence exists to show that any bank in category 2 did anything wrong.SwissTechienoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-12153343685642334192013-12-24T12:51:12.697-06:002013-12-24T12:51:12.697-06:001. The banks will turn over the information within...1. The banks will turn over the information within the scope of the requests whether or not the U.S. depositor waives the disclosure and whether or not the U.S. depositor was U.S. tax compliant (whether on the original filings or later by OVDI/OVDP).<br /><br /><br />2. I would not turn over tax returns to the banks. The banks need proof of U.S. tax compliance. That proof may be provided in several ways. I don't think providing complete U.S. tax returns is appropriate. Perhaps a redacted U.S. tax returns showing only the critical reporting information already known to the banks, along with some type of certification or affidavit.<br /><br /><br />3. I have no control over whether the IRS will check the U.S. tax compliance documents provided by the banks which will, in turn, be provided to DOJ and/or the IRS. I suspect that the IRS will not examine all of the taxpayers who provide proof of tax compliance to the banks; indeed, I suspect they will not examine many of them. Keep in mind that a U.S. taxpayer would be incredibly stupid to provide false compliance documents to the bank which, given the panoply of U.S. criminal provisions that might apply, will create new jeopardy for the U.S. taxpayer.<br /><br /><br />4. Now, as to bank customers not supplying the bank the proof of compliance the bank needs to get a reduction of its penalty, that might cause the IRS to audit. But if it audits, the taxpayer should be able to prove compliance (even though he or she had not submitted the proof to the bank). And, of course, if compliance was through OVDI/OVDP, the IRS can quickly confirm the compliance in an audit of the U.S. taxpayer and not devote any more resources to that audit. If it is an audit, it will be audit light.<br /><br /><br />5. Taxpayers should work with the banks to see if they will bear some of the taxpayers' program costs in return for supplying the documents that will reduce the banks penalty.<br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-71725067142261940162013-12-24T10:27:21.308-06:002013-12-24T10:27:21.308-06:00Jack, so why would a US taxpayer who had reported ...Jack, so why would a US taxpayer who had reported his bank account to the IRS & FBAR be interested in filling out the request confirming US IRS disclosure by the bank. The disclosure requests confirmation of all years 1040 submissions and includes a separate form expressly authorizing the bank to disclose all "information related to the Account" to the US authorities without penalty to the bank, its employees, officers etc thus releasing the bank from compliance with Swiss Banking laws. Will such reporting not encourage IRS auditing? If the former bank customer refusing to sign will the bank not identify the customer to the authorities anyway (thus triggering for sure a high audit risk?FBARistoughnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-3054460021051151462013-12-23T15:52:29.220-06:002013-12-23T15:52:29.220-06:00Mr. Walker,
You make some great points. Thank y...Mr. Walker,<br /><br /><br />You make some great points. Thank you so much.<br /><br /><br />I do think, however, that the U.S.prosecution is sensitive to avoiding death sentences for organizations. We learned a lesson from the Arthur Andersen prosecutions and have been refining that lesson through a series of prosecutions and mini-prosecutions (DPAs, NPAs, etc.) since Arthur Anderson.<br /><br /><br />I speak only as an observer of the process. But I don't think that the U.S. or its agencies DOJ and IRS are out to sink any particular Swiss organization or Swiss banking. If those in authority to make decisions for the banks believe that, they are not (in my opinion) being well advised. I hope those banks have gotten qualified US counsel -- the ones with the best judgment and not necessarily the highest hourly rates.<br /><br /><br />I do think that the banks need closure because of the uncertainty. I do think t hat the DOJ program offers a lot more certainty now. I do hope that those banks will get good counsel as to the real risks (and not in terrorem risks) and conform their current strategies accordingly.<br /><br /><br />As I have said with OVDI/OVDP participants for some time now. Do not from fear and uncertainty assume the worst. While I would not lull any Swiss bank playing in this arena into thinking that things are good, I will say that,for most of them, it is not Armageddon.<br /><br /><br />Thanks,<br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-80288531297131224892013-12-23T14:44:20.234-06:002013-12-23T14:44:20.234-06:00As always you make some interesting points. Howeve...As always you make some interesting points. However, I think one needs to take into account further aspects. First, Swiss Banks are fearing that an indictment in itsself will be lethal because they think there is a possibility that they'll be SWIFT embargoed, which means they would be excluded from dollar clearing (like Iranian banks f.e.). This means that a bank would lose its ability to perform dollar transactions, which is a death sentence for any bank in todays economy.<br /><br />Second, this tax controversy has been going on for the last five years (since the Senate Hearings on Tax Havens in July 2008). Investors, management and last but not least the Swiss regulator are desperate to put this whole affair to an end. And even if a bank would take its chances of being prosecuted, this will very likely end in a settlement, since litigation in the U.S. is astronomically expensice and no one knows if this would be the cheaper solution (Correct me if i'm wrong on the last one).Ed Walkernoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-37787259540704467672013-12-23T13:11:38.217-06:002013-12-23T13:11:38.217-06:00Well, their conduct -- if intentional or willfully...Well, their conduct -- if intentional or willfully ignorant -- was intended to have its consequences inside the U.S. If everything they did have their consequences only in Switzerland, there might be a complaint about extra-territorial enforcement. But the key intended consequence -- U.S. tax noncompliance as to which the Swiss banks and bankers took their share -- occurred here. That is why the banks and the bankers can be charged with conspiracy as well as, based on the same conduct, directly for tax evasion. (I have written on the latter concept before.)<br /><br /><br />JackJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-42872809614169149152013-12-23T13:08:32.065-06:002013-12-23T13:08:32.065-06:00If Swiss banks join Category 2 with "almost n...If Swiss banks join Category 2 with "almost no or no known US clients" -- then they are sadly miscounseled. Of course, we then get to what you mean about "known US clients." We have a concept called willful ignorance, willful blindness and various other formulations that may apply. So, if the Swiss banks are saying that they joining with "almost no or no known US clients," they must have concluded with counsel that their actions were sufficient to constitute willful ignorance, etc. Otherwise, they could not conclude that they probably violated U.S. law. <br /><br /><br />These banks know what they are doing. And like everyone who gets caught with their hands in the cookie jar, they put the best spin on misbehavior. They want you to believe that they did not misbehave, but yet they willing join a program intended for those who know they did misbehave.<br /><br /><br />And, if indeed, they misbehaved with only a few US clients, the penalties will be light.<br /><br /><br />I don't buy their spin.<br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-58508117040565893182013-12-23T13:03:19.691-06:002013-12-23T13:03:19.691-06:00I am not sure you are using the terms bigoted and ...I am not sure you are using the terms bigoted and racist in the way Americans commonly understand and use those terms. That is why your message is tuned out, at least by Americans reading those comments.<br /><br /><br />And, I don't think what the IRS is doing has anything to do with national origin. DOJ and the IRS will proceed against other banks with egregious conduct, regardless of national origin.<br /><br /><br />Switzerland got hit first because of a perfect storm that pointed to Switzerland. There will be more.<br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.com