Chalk one up for everyone’s best friend, the Internal Revenue Service (IRS). Reports surfaced today that 11 Swiss banks are expected to settle a massive U.S. probe into offshore tax evasion.
Officials from both nations are wrapping up negotiations after the U.S. Department of Justice (DOJ) had launched a probe into a number of Swiss banks, including UBS AG and Credit Suisse Group AG—the two largest Swiss banks—for potentially facilitating tax evasion by U.S. citizens and hiding money from the IRS.
The negotiations are part of a civil settlement that would quell the questioning and let the Swiss banks maintain their mystique and tradition of secrecy. As part of the deal, the banks would disclose names and data to the IRS of the American accountholders who have invested their money offshore in an effort to cheat on their taxes, along with a large cash payment.
In 2009, federal prosecutors charged UBS with helping American clients to evade their taxes. UBS admitted it fostered tax evasion, and entered into a deferred prosecution agreement with the DOJ. Under the terms of the agreement, UBS paid $780 million in fines, penalties, interest and restitution and turned over data on nearly 5,000 accounts to the IRS.
“This enforcement effort has dealt fabled Swiss bank secrecy a devastating blow and provided tools that should yield information on thousands of additional U.S. offshore account holders who have undisclosed accounts at UBS and other banks,” the agency said on its website at the time. “Moreover, the publicity surrounding the Tax Division's enforcement action and the subsequent settlement has already produced dramatic behavior changes.”
The Swiss government plans to issue a final accord for its parliament’s Foreign Affairs Committee on Nov. 10.
For more on the story, read Bloomberg.