Voluntary Swiss Bank Tax Evasion Disclosure Program Reaches Final Total of $1.3 Billion

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Bank buildings, representing Citigroup Accused of Spoofing

The Department of Justice has reached the last non-prosecution agreement with a Swiss Bank as part of its voluntary disclosure program which ended in 2013. In total, the U.S. received more than $1.3 billion in penalties from the 80 banks which came forward and settled. The U.S. has received another $8 billion from 54,000 taxpayers who have come forward through the IRS Offshore Voluntary Disclosure Program.

The final bank to pay a penalty under the Swiss Bank program, HSZH (previously Hyposwiss Privatbank AG), agreed to pay $49.757 million.

The program to encourage cooperation in the investigation of tax evasion through foreign bank accounts was announced in August, 2013. It required participating banks to agree to pay substantial penalties, complete disclosures of cross-border activities, cooperate in other prosecutions, agree to close accounts of account holders who fail to comply with U.S. reporting obligations. The agreed penalty was set at a percentage of assets in secret accounts, with the penalty increasing for those accounts opened after August 1, 2008 and the end of February, 2009.

The final settlement is unlikely to end announcements concerning tax evasion by Swiss banks as the United States will undoubtedly continue investigating those banks which were not eligible for the program since they were already on the radar of the DOJ at the time the program was announced. There are reportedly around a dozen Swiss banks still under investigation. Credit Suisse and UBS have been the largest settlements so far.

The IRS whistleblower program paid out its largest award ever in the case against UBS – a record $104 million. It is unknown whether there are any pending whistleblower filings concerning the remaining tax cases. The IRS generally does not disclose the recipient of rewards or the matter which resulted in the successful recovery.

If you have information that could prove useful to the Internal Revenue Service’s tax enforcement efforts or have questions about reporting tax evasion, please call 1-800-590-4116 to speak to one of our IRS whistleblower attorneys.