The Swiss newspaper Finanz and Wirtschaft reported that about 80 of the 106 Swiss banks that signed up in Category 2 under the US Tax Program could be fined less than they had feared for their role in helping wealthy Americans cheat on their taxes. However this has a price, the US tax authorities expect a wider cooperation from the banks in exchange.
It seems that more than 20 banks that applied for Category 2 did not meet the criterias and changed categories or left the US Tax Program all together.
The penalty calculation specifications provided by the Department of Justice in the June 5, 2014 comments were confirmed. This lowers the fine by around 20 – 50% told a source the Swiss newspaper.
The Illustration 1 below provides an example for the calculation methodology where the maximum dollar value of all non tax compliant accounts during the applicable period is summed up.
With the new interpretation of the calculation -Illustration 2- the maximum is calculated on a specific date for each of the fine periods (20, 30 or 50%). Therefore accounts that did not exist during these dates or that have a zero amount, are not considered in the aggregation.
Banks have time until end of July 2014 to put together evidences showing that an account is declared.
After that and only until mid September Voluntary Disclosures by the clients can help the banks to mitigate the penalty amount if they can prove that a specific person came forward thanks to the bank’s efforts and initiative.
According to parties involved the requests for information are more and more similar to the ones from Category 1 banks. Recently the US authorities asked for a detailed descriptions of the misconducts of the Category 2 banks. The banks need to list in a Statement of Facts their wrongdoings in order to obtain a Non-Prosecution Agreement (NPA) from the Department of Justice.
See also Reuters