FATCA disclosures on the rise, 50 percent penalty applies for more Swiss banks

On Behalf of | Jun 18, 2015 | Tax Controversies

More Swiss and other non-U.S. banks continue to cooperate with the U.S. government under the Foreign Account Tax Compliance Act, and American taxpayers with offshore accounts should be sure to take action now to come into tax compliance. Hesitating could lead to criminal prosecution and heavy civil penalties.

The IRS recently added nine more non-U.S. banks to an already long list of banks that, for U.S. taxpayers, automatically trigger a hefty penalty. In 2014, reform of the Offshore Voluntary Disclosure Program increased the penalty from 27.5 percent to 50 percent of your highest account balance if you have an account at any of the listed banks.

If a taxpayer is found to have committed a willful violation of FATCA, then the IRS may apply a penalty for each violation over the course of years. That means the penalties leveled against a taxpayer could actually exceed the total amount of his or her current account balance.

Following are the nine non-U.S. banks most recently added to the automatic 50 percent list:

  1. Berner Kantonalbank AG
  2. Société Generale Private Banking (Suisse) SA
  3. Rothschild Bank AG
  4. Banca Credinvest SA
  5. Scobag Privatbank AG
  6. MediBank AG
  7. LBBW (Schweiz) AG
  8. Société Generale Private Banking (Lugano-Svizzera) SA
  9. Finter Bank Zurich AG

So far, about 100 Swiss banks have cut a deal with the U.S. Department of Justice, and FATCA disclosures are on the rise. To stay safe, taxpayers with accounts at non-U.S. banks should seriously consider applying for the OVDP as soon as possible.

Talk to a tax law attorney about your available options for minimizing or avoiding civil tax penalties.