Banking Haven Slowly Reversing Secrecy Tradition
When people think of Switzerland, they probably think of skiing on the Swiss Alps, neutrality during wars and its unique flag: a red square with a centered white cross.
But savvy financial experts and tax attorneys know about Switzerland’s long-held tradition of banking secrecy. As the global capital for offshore banking, the small European country is considered a safe haven when it comes to hiding money from tax authorities.
In an effort to crack down on tax cheats, the US government demanded confidential information about tax evaders from 10 Swiss banks. Instead of defying Uncle Sam, the banks gave in. Sort of.
The Swiss banks didn’t provide any client data like names of account holders, but the banks did provide statistical data showing the extent of Americans’ tax evasion through the use of Swiss banks.
Part of the information reportedly handed over was an estimate of the number of Americans using secret accounts from 2002 to 2010. US officials suspect that tens of billions of dollars are stored in Swiss banks, free from IRS authority and depleting US government revenues.
The size of the offshore financial industry is estimated at $2 trillion and Switzerland is likely a big part of it. But as the financial crisis reduced revenues for governments worldwide, the Swiss have pledged to bring tax cheats out of the woodwork and into the sunshine, giving the IRS an edge when it comes to collecting taxes.
If part of your assets are stored overseas, it’s only a matter of time until the IRS finds out. If you have more than $10,000 overseas, reporting it is required. Unlike the Swiss, a good tax attorney is not neutral, and can defend your rights. With a little guidance, they can help you avoid penalties, criminal prosecution and forgoing of assets.
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