Credit Suisse, Switzerland's second-largest bank, has begun notifying their U.S. clients with undisclosed offshore accounts that the Bank intends to turn-over client data to the Internal Revenue Service (IRS). Credit Suisse’s decision to hand-over client information was in response to a formal request by the IRS issued on November 2, 2011. This development may pressure the Swiss Government into finalizing a settlement with the U.S. in hopes of absolving all tax evasion allegations before U.S. agencies begin to formally request the information.

The Swiss Government recently proposed a multibillion-dollar settlement to U.S. authorities, likely to reach $10 billion or more. This settlement was proposed to remedy pending investigations and allegations regarding the potential involvement of Swiss banks in encouraging U.S. clients to commit tax evasion through undisclosed offshore accounts. The settlement is expected to cover all Swiss Banks, approximately 355 banks, including Credit Suisse.

European banks are ready to pay billions to the United States, as well as disclose U.S. clients’ names to the Internal Revenue Service (IRS) and the Department of Justice (DOJ). Switzerland has been known as one of the largest tax havens in the world and wishes to continue its long-practiced tradition of tax secrecy and has allegedly agreed to divulge information requested by U.S. agencies, including U.S. taxpayer information.

In an effort to promote full disclosures and tax compliance, the Internal Revenue Service has been sharing personal and financial U.S. taxpayer information with other foreign countries.  The exchange of such information could further provide U.S. agencies with sufficient evidence to open criminal investigations against U.S. taxpayers with undisclosed offshore banks accounts.

On Wednesday, September 28, 2011, U.S. authorities charged another India-American, Arvind Ahuja, for evading taxes through the HSBC India branch. These findings have heightened the pressure on HSBC, fueling the fire for the U.S. to build a strong case against the bank and it’s U.S. clients with undisclosed foreign accounts.