The U.S. is reviving its attack on tax evaders to find out where clients with Swiss bank accounts fled after a years-long crackdown on Switzerland. Three countries are in the crosshairs.
The Internal Revenue Service (IRS) was swamped with more than 45,000 Americans who have come clean on their offshore money when the tax office offered them an amnesty.
U.S. prosecutors reaped close to $10 billion from Swiss banks, in part by directly prosecuting firms including UBS ($780 million), Credit Suisse ($2.6 billion) and Julius Baer ($547 million). Some, including Geneva-based Pictet, are still waiting.
Those prosecutions led 76 private banks in Switzerland to ink settlements to pay fines for past sins in exchange for escaping prosecution. Is it over for Switzerland?
Swiss Banks Delivered
Only partly. The IRS plans to mine the data it received as part of the years-long probe to figure out where Swiss bank clients took their money when it became too dicey to hide money in Switzerland, an official tells the «Financial Times».
«I think there are areas of offshore tax evasion that still have to be pursued. The key is trying to tie that information together and follow the money and see where it leads,» deputy IRS director Don Fort said in an interview.
The 76 banks which came clean in the standardized program delivered data to the U.S. on how much in undeclared money they had bled as a result of cleaning house, and to which banks clients had transferred their funds.
Data Leads to Asia, Israel
The «data graveyard,» or reams of paperwork, represents the motherlode for U.S. investigators, who can cross-reference with the 45,000 taxpayers who have come forward as well as other data such as from the Panama Papers and from whistleblowers – in order to begin the hunt for those who haven't.
Justice and tax officials are zeroing in on Israel, Singapore and Hong Kong after Switzerland, Fort told the newspaper.
«I'll continue to appoint significant resources in this area,» even as the IRS' enforcement budget shrinks dramatically.
Swiss Aftershock
A spokeswoman for the Swiss Bankers Association emphasized that no client data was delivered as part of the standardized U.S. program, and the data exchange was congruent with Swiss secrecy laws.
The Swiss probe roiled the country's offshore sector, but it isn't quite over yet: last year, UBS – which had originally settled in 2009 – agreed to hand over information on an American who moved funds from the bank's Swiss office to Singapore. The bank is not believed to face further sanction.
Credit Suisse is also on the hook after $200 million in untaxed money, held offshore by a well-known former business professor who taught in Switzerland, emerged well after its 2014 criminal settlement and guilty plea.
