According to the Wall Street Journal:
“ZURICH—Swiss banks are seeking to chip away at potential penalties from the U.S. Justice Department by offering to compensate American clients who disclose their hidden accounts, according to people familiar with the matter.
More than 100 Swiss banks have signed up for a self-reporting program offered last year by the Justice Department, which can result in penalties for harboring undeclared American accounts. Banks can mitigate penalties by encouraging clients to pre-emptively disclose those accounts to the U.S. Internal Revenue Service.
Some banks have dangled financial incentives in front of current and former clients to entice them to divulge accounts to the IRS. In some instances token amounts of around $5,000 are being offered, attorneys and financial advisers say. In other cases significantly larger offers are selectively being made to share the legal and accounting costs that accompany the voluntary disclosure process.
A client entering voluntary disclosure can face fees amounting to hundreds of thousands of dollars, attorneys say.”
Interesting commentary from Robert Steinberg follows:
An article in the Wall Street Journal on July 19, 2014 by John Letzing (“Taxpayers Get Incentives to Report: Swiss Banks Aim to Entice Americans to Disclose Accounts to IRS by Helping Cover Costs, Penalties”), reveals what many professionals have known for a while. Some Swiss Banks are pressuring and offering inducements for clients to enter the IRS Offshore Voluntary Disclosure Program and agree to waive Swiss Bank Secrecy laws that the banks can disclose their accounts.
Why are the Swiss banks so eager to have their American customers enter the OVDP that they would offer financial incentives?
Answer: Because, it serves the bank’s interests. Over 100 smaller Swiss banks have entered the Swiss Bank Settlement Program offered by the Department of Justice and sanctioned by the Swiss government. These so-called Category 2 banks not presently under investigation will pay a penalty under negotiated non-prosecution agreements (NPAs). The banks must…
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