On Friday, April 11, 2014, we posted "Swiss Bank Information Can NOW be Disclosed to Foreign Tax Authorities WITHOUT Notice!"where we discussed That the Swiss Parliament has approved a legal amendment that tax evaders will not always have to be told if Switzerland sends information about them to other countries. The move further loosens Swiss banking secrecy laws in order to avoid a global backlash.Now the Swiss agreement with the US to implement the Foreign Account Tax Compliance Act came into force last week. The Swiss Federal Department of Finance announced that its Model 2 intergovernmental agreement with the U.S. for the Foreign Account Tax Compliance Act has entered into force and the implementing act will enter into force June 30.
The two countries signed an agreement to implement FATCA in February 2013. The agreement was approved by the Swiss parliament in September 2013 and came into force June 2 following an exchange of documents between the two countries, the finance department announced June 6.
Under the Model 2 agreement, Swiss financial institutions will be required to disclose account details on their U.S. clients directly to U.S. tax authority, subject to the consent of the U.S. clients concerned. The U.S. government will have to request data on U.S. citizens who have refused consent through the normal administrative assistance channels, the Swiss finance ministry said.
During a June 6 meeting, the Federal Council voted to bring the parliamentary-approved FATCA Act, together with the ordinance on disclosure obligations, into force June 30, enabling Swiss financial institutions to implement the regulations.
So the reality call for all you US Citizens and residents with a unreported income from Swiss Banks is as follows:
- If your account is with one of 106 Swiss Banks, then your information is probably already on its way to the IRS on or before June 30, 2014!
- If your account is with another Swiss Bank, you are probably already received notification that as of July 1, 2014, your account information will be turned over to the IRS, pursuant to FATCA and
- If you're not with the Swiss bank your information, as of July 1, 2014, your account information will be turned over to the IRS, pursuant to FATCA.
US taxpayers who have unreported income from Swiss bank accounts may now want to consider applying for the US Offshore Voluntary Disclosure Program (OVDP), which sets a limit to the penalties imposed on them by the Internal Revenue Service (IRS) for failing to declare foreign assets and earnings.
However, once the Swiss banks disclosed an account holder's name to the IRS, which 106 of them y must do by no later than June 30, 2014; the OVDP option is no longer available to that US Taxpayer Account Holder.
The US Can Use Swiss Data for Law Enforcement Actions!
The new agreement makes clear that “personal data provided by the Swiss banks… will be used and disclosed only for purposes of law enforcement (which may include regulatory action) in the United States or as otherwise permitted by US law.”
Have Un-Reported Income From a Swiss Bank?
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Swiss Federal Council