Credit Suisse: Giving Up More Information To The IRS

The Wall Street Journal is reporting today more success for the IRS' fishing expedition investigation into Americans with unreported foreign accounts.


ZURICH— Credit Suisse is handing over more internal documents to U.S. authorities in response to Washington's crackdown on tax evasion, according to an internal memo reviewed by The Wall Street Journal.


Earlier this year, Switzerland's second-largest bank by assets and at least four smaller lenders transferred correspondence concerning details of their U.S. operations and containing thousands of names of employees who have dealt with American clients, causing controversy in Switzerland over personal privacy.


Bear in mind that many Swiss account holders have not taken advantage of the IRS Offshoare Voluntary Disclosure Program. While approximately 33,000 US taxpayers have come forward under three different initiatives since 2009, it is our experience that a huge amount of that figure is now comprised of accounts from east Asia, most notably India, China, Hong Kong, Japan and South Korea — disclosures that we submit for Swiss accounts are now the exception rather than the rule.


So what explains this result? I have a few ideas:

  • A lot of account holders are hiding behind foreign companies they control and think that may provide them with a layer of protection between then and their Offshore Accounts
  • Some have just dedicated themselves to ultimately being caught…or else. Like Bernie Madoff who was surprised his ruse lasted so long, or they live for today, hoping they'll be dead when they're caught.
  • Some are going to just wish-casting this problem away. They just hope, despite all evidence that everything will go back to normal and with a wink and a nod, this regrettable fad of offshore tax enforcement will go out of style.
  • Some have gotten bum advice and opting for some sort of 'soft-disclosure.'


What most account holders don't realize, is that it is far more likely to be detected by an audit, rather than a criminal investigation. But the results of an audit could certainly lead to criminal charges. Right now, the IRS is stepping up its audit rates of people with high income and those it suspect to hold undisclosed offshore accounts.


Being in the near-epicenter of where the IRS has told us it suspects most account holders reside — New York, New Jersey and Connecticut —  we have been seeing many more inquiries for representation from those who find themselves in such circumstances. And once you are under audit, you may not use the OVDP. So options get limited, attorney fees go up and penalties increase.


If you need assistance understanding if you should get into a program, or what option is best for you, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.