Changing Rules of Engagement in the War on Swiss Bank Accounts

Forbes IRS Watch Blog
02.24.11
In this blog post, George Clarke discusses the changing rules of the IRS crackdown on Swiss bank secrecy. Last week, the Swiss Federal Tax Administration announced that it would no longer require the taxpayer’s name and address in all treaty requests. Although the SFTA disclaims that this allows fishing expeditions, it is hard to see it any other way. If the IRS has a list of account numbers it has gathered from an “informant” or wire transfer information from a suspicious shell company inconveniently not listing a known U.S. person, and it repackages that information in a new form, with a statement that it has reason to believe that the account numbers relate to U.S. taxpayers with undisclosed foreign accounts, the IRS now apparently can get the Swiss authorities to provide evidentiary quality verification of the name and address of those taxpayers through the treaty mechanism to use in prosecutions. This is a sea-change in the war on Swiss offshore accounts. Taxpayers can no longer rely on the fact that their name is not known to the IRS. With relatively minimal information received from a thief or a shell-company wire transfer, the IRS can extract the intelligence it needs from the Swiss authorities and use it to prosecute the taxpayer.
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