Swiss Banking Secrecy Laws EVAPORATING!

Education & Training

Switzerland and the United States have agreed on a new Tax Information Exchange (TIA) Agreement, a further erosion of offshore banking secrecy. The new agreement will allow the U.S. greater access to banking records regarding Americans with Swiss accounts. Americans who have relied on offshore secrecy to avoid getting caught by the IRS need to re-examine their strategy. IRS guidelines require citizens to pay taxes on all their worldwide income.

Many issues remain about the agreement: whether it will be narrowly tailored to requests regarding specific people, or more general fishing expeditions, like the ‘John Doe' summons the United States is presently seeking to enforce against UBS. It is also not known whether the new TIA will only be prospective, or whether it will require disclosure of past accounts. The agreement will be subject to public referendum in Switzerland, where challenges to traditional banking secrecy have met with vigorous defense.

Another open issue is whether the new agreement will result in the IRS dropping its litigation against UBS, demanding the disclosure of 52,000 accounts. The Swiss have indicated that the new agreement will effectively settle that case, while American officials state that the litigation will continue and the IRS will pursue disclosure of the offshore accounts.

In light of these events, Americans with non-compliant offshore accounts should consider voluntary disclosure before the IRS discovers their accounts. The IRS is offering a sort of amnesty to taxpayers who voluntarily come forward before they are discovered. The IRS' Voluntary Disclosure Program offers reduced penalties and a promise of no criminal prosecution. This program expires in less than three months and will not apply to taxpayers once the IRS gets their names.

Pre-emptive disclosure can be made by qualified legal counsel, experienced in offshore compliance and IRS negotiations. A qualified law firm can approach the IRS on your behalf, demonstrate proper current compliance and negotiate to avoid criminal prosecution and reduce fines and penalties for past non-compliance. Although fines and penalties may be significant, they pale before the consequences of an IRS criminal prosecution.

Smart investors have always complied with the IRS regulations and used the proper loopholes to legally pay as little as possible. Solutions include not moving your money back and forth offshore which is a huge red flag, but to simply grow it offshore in real estate and then leave the equity there. If no liquidation of assets occurs, then no income is derived and no tax consequences occur.

Specializing in legally reducing your taxes is actually quite simple, once you become a worldwide citizen. The country of Belize, a tax haven that CONTINUES to respect the privacy of its bank account holders is one of my favorite places to invest in ocean front real estate. For details, contact me at

Comments (2)

Eric Villaverde
DoubleTree Home Inspection Services L.L.C. - Phoenix, AZ

Thanks for writing your informative post this morning. Have an awesome weekend

Jun 27, 2009 01:38 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

We invite you back to ActiveRain.  Much has changed since your last blog post.  We would welcome your return!

Aug 09, 2017 02:09 PM