EDGE Magazine | Q3 2011
their account information to the US, whether such taxpayers have accounts with Credit Suisse or elsewhere in Switzerland. Following the July 21 indictments, a Credit Suisse representative stated, "Credit Suisse is committed to a fully compliant cross-border business. Subject to our Swiss legal obligations and throughout this process we will continue to cooperate with the U.S. authorities in an effort to resolve these matters."12 Furthermore, the media has reported that the US and Switzerland are in advanced talks on a resolution that would impact Swiss and European banks.13
BNA quoted
Roland Meier, Swiss Department of Finance spokesman as stating, "Switzerland is in discussions with the US authorities about a general solution to settle tax problems of the past."14
In exchange for the US dropping their
criminal investigations into the institutions, the banks would pay a fine far in excess of the $780 million previously paid by UBS, exit their unreported offshore banking business for US taxpayers, and provide the US with the information on those taxpayers who had unreported accounts at the institutions.15
who had unreported accounts at either of these institutions should strongly consider resolving their compliance immediately, recall that FAQ #25.1 requires taxpayers to make a good faith showing that they attempted to comply with the August 31, 2011 deadline prior to receiving an extension. In spite of Miller's comments that anyone requesting an extension will receive one, there may be a risk for these taxpayers as their coming forward subsequent to the recent news may be interpreted as a lack of good faith.
Conclusion While all taxpayers are treated the same within the 2011
VDP, such that intent is irrelevant, it does provide a method by which to resolve noncompliance. Notwithstanding, the 2011 VDP may not be appropriate for everyone. Taxpayers should be aware, however, that it is getting increasingly more difficult to hide assets. The US is focused on reducing the tax gap, and increasing tax revenue. As such, legislation continues to be introduced. On July 12, 2011, Senator Carl Levin introducing the Stop Tax Haven Abuse Act, which will provide the IRS, if enacted, with new tools. Additionally, the Foreign Account Tax Compliance Act, which was enacted last year, in part, has already provided the IRS with increased statutes of limitation in which to investigate taxpayers with foreign noncompliance.
While taxpayers
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If you would like to discuss options for resolving your compliance or require assistance in dealing with the IRS, Holland & Knight’s Offshore Tax Compliance Team is available to offer assistance.
#10472708_v2
Kevin Packman U.S.A. Holland & Knight
kevin.packman@
hklaw.com
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