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Scott Michel Comments on Swiss Life Settlement with DOJ in Tax Notes

May 16, 2021, Tax Notes

Switzerland’s largest insurance company and three subsidiaries will pay $77 million as part of a deferred prosecution agreement (DPA) with the U.S. Justice Department after admitting they helped U.S. clients evade taxes through insurance wrapper policies.

. . .

News of the Swiss Life DPA comes almost exactly seven years after Swisspartners Investment Network AG, a Swiss asset management firm, resolved its matter, according to Scott Michel of Caplin & Drysdale.

Swisspartners had entered into a non-prosecution agreement with the Justice Department in May 2014 and agreed to pay $4.4 million in restitution and forfeiture for helping U.S. taxpayers keep undeclared foreign accounts.

Because Swiss Life is the biggest insurance company in Switzerland, its $77 million disposition is significant, Michel told Tax Notes.

“Like other similar dispositions, the amount paid by Swiss Life includes a penalty, the amount of which Swiss Life was likely able to reduce significantly by working to drive its U.S. taxpayer clients into compliance through the IRS’s various offshore disclosure programs or otherwise documenting their tax compliance,” Michel said. The disposition is in line with the template of previous cases that were inside and outside the Justice Department’s Swiss bank program, he added.

The DPA also indicates that Swiss Life significantly cooperated with the investigation, such as by turning over client account details to the Justice Department, according to Michel. If any Swiss Life clients have not yet corrected any prior noncompliance, they could face further civil and criminal tax enforcement efforts, he said.

“The DOJ Tax Division continues to use its broad enforcement powers to send a strong deterrence message globally to financial services institutions of the legal and financial consequences they will incur if they help American taxpayers hide assets offshore,” Michel said.

For the full article, please visit Tax Noteswebsite (subscription required).


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