Swiss Banks used to be well-known for their discretion and many U.S. citizens and U.S.-connected individuals kept money in offshore accounts for privacy. The Swiss Bank Program, however, incentivizes banks that believe they could be charged with facilitating tax evasion to come forward and report on their customers.  If banks participate in the Swiss Bank Program, pay a fine, and cooperate with U.S. authorities, the banks will minimize the penalties they face for their own failures to follow tax rules. Many financial institutions have taken advantage of the Swiss Bank Program and the Department of Justice has announced four additional banks can be added to the lengthy list of institutions turning over details on accountholders.

The Swiss Bank Program has resulted in offshore banks paying millions of dollars in penalties.  Just recently, Courthouse News Service  indicated that there are three additional banks now participating in the Swiss Bank Program.

The Department of Justice has a tax division that investigates tax evasion and pursues cases against tax evaders.  Recently, the acting Assistant Attorney General (AAG) made a keynote speech at a continuing legal education event that was being held by the American Law Institute.  The contents of her speech explained the current DOJ priorities, which include a continued crackdown on offshore accounts as well as a renewed focus on employment tax evasion.

Schaffhauser Kantonalbank (SHKB) is a Swiss Bank that has a long history of allegedly helping U.S. accountholders to conceal income from taxing authorities in the United States. SHKB entered into a Qualified Intermediary Agreement in 2001 to make sure U.S. investors were paying their taxes on offshore income, but SHKB reportedly found ways around the agreement almost immediately-including requiring accountholders to have their mail held and prohibiting the purchase of U.S. securities.

Anyone who is a citizen of the United States must provide annual reports of money and assets held in accounts located in offshore financial institutions.  This requirement was established by the Foreign Account Tax Compliance Act (FATCA) in an effort to help fight tax evasion.  Because some individuals do not voluntarily report their accounts as required, the U.S. government is also seeking to obtain information from foreign financial institutions (FFIs).