Swiss bank account holders, time to fess up!
A Swiss flag flies under dark clouds. Switzerland's oldest bank, Wegelin and Company, will close down after pleading guilty to helping wealthy Americans evade taxes.
If you have a hidden Swiss bank account, now’s probably the time to admit it. Dec. 31 is the deadline for famously-secretive Swiss banks to sign up for non-prosecution deals with the U.S. government, in exchange for passing over detailed account information about their American clients.
“The Justice Department and the IRS have always looked at these cases as if you come clean and you come forward before we get your name, you can avoid prosecution,” says Jeffrey Neiman, a lawyer who helped prosecute the government case against the Swiss bank UBS.
In 2009, UBS agreed to identify its American customers and pay the U.S. $780 million to settle charges it helped Americans avoid taxes.
But owning up isn’t as easy as writing a heartfelt apology to the IRS.
“Americans with undeclared assets are going to file eight years of amended tax forms, eight years of delinquent other forms and they are going to have to pay whatever tax is owed," says Neiman.
Eight years of tax forms. Big penalties. It sounds like a lot. But failure to report could be a whole lot worse.
“You’re risking jail,” says Neiman. And losing a big chunk of your account value.
So, let’s weigh the odds. Just how likely is it really that the government will track you down?
“You know the thinking now is that it’ll probably come out, maybe not today, maybe not tomorrow, but before too long,” says James Hines, a law professor at the University of Michigan.
Swiss banks don’t want trouble with the U.S. government any more than the rest of us. They’re likely to hand over your account information if it keeps them off a prosecutor’s to-do list. Which is why lawyers think the best thing hidden account holders can do is, fess up.