USB Tower in Chicago
This week USB, a worldwide financial services company based in Switzerland, agreed to disclose at least some of the names of 52,000 of its rich U.S. clients suspected of tax evasion. They did so under pressure from a lawsuit brought by the U.S. government.
Some wealthy Americans, whether they live at home or abroad, look for private places to sock away money—places far from the prying eyes of the Internal Revenue Service (IRS). Witness the proliferation of ads, books, and advisors advertising how to take your money ‘offshore’ – from Panama to Hong Kong to Switzerland.
Swiss banks used to be the gold standard in security and privacy, with Swiss law jealously guarding the identity of anyone with accounts in that country’s banks.
Not any more. Lawyers involved in the suit predict that USB will release from 3,000 to “more than 10,000” names of Americans suspected of using offshore accounts to evade taxes.
Possibility of amnesty
Which of the 52,000 U.S. names will be revealed? If you’re wondering if your name will appear on the list, you might want to check out the IRS amnesty program that lets Americans reveal secret Swiss bank accounts in exchange for lower penalties. That program ends on September 23, 2009.
The fallout
In an attempt to avoid what is befalling USB, other Swiss banks have started to shut down secret accounts of U.S. clients. Many observers believe that the U.S. suit against USB will cause banks not only in Switzerland but around the world to rethink their relationship with U.S. clients who demand secrecy in their banking.
"For U.S. taxpayers it is going to be impossible to hide money in Switzerland, and it is just a matter of time that this is the case also for Germans and Britons," said Asher Rubinstein, a partner at Rubinstein & Rubinstein LLP in New York. "Switzerland will no longer be a tax haven."
Comments