What happens when the DOJ accuses a Swiss bank of tax evasion?

They cooperate. At least that is what happened when the Department of Justice (DOJ) recently went after a Swiss bank accused of helping United States citizens hide assets and avoid tax obligations.

Details of the DOJ’s findings

The DOJ recently announced it entered a deferred prosecution agreement with HSBC Private Bank, a bank that operates in Switzerland. Essentially, this means the bank agrees to accept responsibility for the listed allegations and cooperate in the ongoing investigation with the Internal Revenue Service (IRS) as well as other federal agencies in exchange for the United States choosing not to move forward with prosecution against the bank.

The United States government accused the bank of hiding over $1 billion in undeclared assets for United States citizens. As part of the agreement, the bank admitted to assisting United States citizens in attempts to hide their assets from the IRS and agreed to pay the U.S. government $60 million. This amount is said to “represent the unpaid taxes” that resulted from the failure to report these assets.

More on the cooperation provision

Those who use foreign accounts are wise to learn from the cooperation provision contained within the deferred prosecution agreement. This provision requires officials at the bank provide information about United States related accounts within the bank. Bank officials who fail to do so could face additional charges.

United States citizens with foreign accounts are wise to take note. Foreign officials are sharing information about bank accounts held by those who owe taxes to the United States. Now is a good time to review the status of foreign accounts to better ensure compliance with United States tax laws.

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