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The Daily Tax Report Quotes Scott Michel: Swiss Bank Agrees to Pay U.S. $211 Million to Avoid Prosecution for Aiding Tax Evasion

March 30, 2015, Daily Tax Report
The Daily Tax Report quoted Scott D. Michel concerning the impact of BSI SA agreeing to pay $211 million to the U.S. for helping Americans evade taxes. The agreement is part of a U.S. disclosure program in which Swiss banks escape charges if they pay penalties and detail how they helped U.S. account holders. For the complete article, please click on the link above to view a PDF.

Excerpt taken from the article. 

Impact for Individuals

Scott Michel, a member of Caplin & Drysdale, told Bloomberg BNA that the BSI agreement has consequences for taxpayers who want to go into the Internal Revenue Service's Offshore Voluntary Disclosure Program, an initiative that allows them to pay a set penalty to avoid criminal prosecution.

OVDP Consequences

"One of the big takeaways here is that for an American with an unreported account at BSI, if they had gone into OVDP last Friday, their OVDP offshore penalty would have been 27.5 percent of their highest balance," Michel said March 30. "But as of this Monday morning, the penalty is now 50 percent."

Michel said names being turned over under the BSI agreement are "probably those of individuals who have signed waivers of bank secrecy," since banks in the program are still bound by Swiss law.

He noted under the program, even without names, Swiss banks have to provide substantial information on accounts that have closed since August 2008.

"This is because the DOJ and IRS are looking for ‘leavers,' i.e., account holders who saw that they were at greater risk of disclosure in their Swiss bank and decided to move their money elsewhere," Michel said. "Banks are provided transactional data on such accounts, including information about where the money went when the account was closed."

He said banks are also providing information to the DOJ to help demonstrate that a given account was in compliance or properly disclosed, in order to receive penalty mitigation.


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