Many U.S. investors have placed their trust in Swiss banks and bankers to maintain the strict secrecy standards that helped the banking industry in Switzerland to grow.  In Switzerland, tax evasion is not a criminal act (although tax fraud and money laundering are illegal).  Furthermore, the law and longstanding traditions make it a crime for Swiss bankers to disclose client names.

US citizens living abroad likely want to have bank accounts in the country where they live. This is especially true if the ex-patriot is interested in doing business in his new home country or has married a foreign spouse.  Unfortunately, a law passed in 2010 to fight tax evasion is having an adverse impact on the lives of ex-patriots who simply want to be able to have normal banking and investment firm relationships where they live.

Today, it is easier and faster than ever before to move money and investments around the globe. Many people invest offshore for added gains, diversity of investments or privacy reasons. However, there are also some investors who have put money into offshore bank accounts in order to avoid some of the taxes that are due in their country of residence.

The U.S. government has gotten serious about preventing revenue loss that occurs when American keep accounts offshore. There are numerous laws that are designed to make it easier for the government to find people who have offshore investments and to take action if these investors aren’t paying their taxes.

Foreign bank accounts must be reported to the Internal Revenue Service every year when you file your tax returns. If you failed to file the Report of Foreign Bank and Financial Accounts (FBAR), then you are in violation of U.S. tax law and you could face fines, penalties and even prosecution.