The US department of Justice (DoJ) are receiving hoards of information about US taxpayers with undeclared Swiss accounts via the US Tax Program that was agreed in August 2013. In this Program the participating institutions must turn over detailed information on US-related accounts above $50k. Firms can alleviate their penalties by, for example, convincing their American clients to confess to the Internal Revenue Service (IRS). Ms Davis from the DoJ stresses that US officials ‘are not just taking a bank’s word; [they] are demanding proof from them’ says the Wall Street Journal. US authorities are leveraging those data, in particular to identify people who proceeded to a ‘quiet disclosure’; those people submitted correct prior-year tax returns and asset reports instead of formally entering the IRS’s Offshore Voluntary Disclosure Program (OVDP). The main reason being that the OVDP imposes high penalties up to 50% of the amount of the undeclared account while offering participants a protection from prosecution.
So far, nine banks in Category 2 have completed the US Tax Program and paid penalties totaling $25m.