Recently, a secretive law firm in Panama with a long history of representing some of the world's most powerful and wealthy people had its records leaked. More than 11 million records were released. These records are being called the Panama Papers and they are being reviewed by 107 different media organizations spread across 76 countries. They are likely also being subject to close scrutiny by taxing authorities within multiple countries worldwide. 

The Swiss Bank Program provides an opportunity for banks that facilitated U.S. tax evasion to avoid being criminally prosecuted. The banks can come forward to voluntarily report their involvement with helping U.S. accountholders hide money offshore. While the banks will have to pay a fine, they won't face criminal penalties and the financial penalties will generally be much lower than if they did face criminal prosecution after an investigation by the Justice Department.  The banks will, however, have to provide specific details about accounts and accountholders.

Offshore banks are turning investors in for tax evasion, and the IRS and Department of Justice have become aggressive in enforcement activity for those with undeclared offshore funds. If you didn't file annual Reports of Foreign Bank and Financial Accounts (FBARs), the IRS could begin investigating you and could possibly consider criminal prosecution. That being the case, you're at risk of substantial financial penalties and other consequences.

Banking privacy used to be revered in Switzerland, but the U.S. crackdown on Swiss banks has prompted more than 106 Swiss financial institutions to turn over detailed information on account holders and financial transactions. These financial institutions have been participating in the Swiss Bank Program, which allows amnesty from criminal prosecution for banks that voluntarily come forward. Since 2013, the U.S. Justice Department has been making deals, collecting penalties, and using information provided by financial institutions to pursue investors who didn't declare their offshore accounts.

The Swiss Bank Program was created to encourage offshore financial institutions to come forward, voluntarily report how they aided in tax evasion, and provide information to U.S. authorities about both accountholders with undeclared funds, as well as other financial institutions that engaged in transactions with these accountholders.  The banks that take advantage of the Swiss Bank Program pay penalties and give up enough details on accountholders to be actionable, as well as agree to cooperate with treaty requests for information. In exchange for doing all of this, the banks can enter into non-prosecution agreements and avoid facing criminal charges.