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Another Bank is Under Investigation for Tax Evasion: Credit Suisse


Posted in on September 21, 2016

The U.S. government has been cracking down on banks that help to facilitate tax evasion by U.S.-connected persons.  Just recently, the Wall Street Journal reported that the Swiss Bank Credit Suisse is under investigation for its handling of accounts owned by American clients. Credit Suisse has had trouble with the U.S. Department of Justice before, but this time the investigation relates to whether bank employees in Israel helped people who were dual U.S. and Israeli citizens to conceal their U.S. status so they would not have to pay taxes in America.

As banks come under investigation, they often end up turning over accountholder information to authorities as part of non-prosecution agreements. This means if you have money with Credit Suisse, you need to understand what your options are for protecting yourself from an accusation of tax evasion. A Maryland tax lawyer can help those who have offshore funds explore ways to reduce any possible financial penalties that could arise if their bank gives the IRS their account details.

The Investigation

The U.S. Foreign Account Tax Compliance Act (FATCA) imposed a number of disclosure requirements on banks. Under FATCA, information on bank clients who are identified as being American must now be automatically transmitted to U.S. tax authorities. The Justice Department believes that Credit Suisse employees in the Israeli office of the bank had been helping clients conceal their dual citizenship in order to avoid having their accounts reported under FATCA.

A spokesperson for Credit Suisse indicated that five employees had been placed on leave in connection with the allegations and said the bank is conducting its own internal investigation into tax matters.  The probe is focused both on the conduct of Israeli bank employees in the time leading up to the 2014 guilty plea, as well as the time after the bank admitted to helping facilitate tax evasion.

Credit Suisse has been working on efforts to improve its compliance after entering a guilty plea with U.S. authorities in May of 2014 for conspiring to facilitate tax evasion. As part of the plea, Credit Suisse paid $2.6 billion in penalties to various regulators and agreed to close the accounts of U.S. clients who were not reporting their accounts to the IRS for tax purposes. Credit Suisse also agreed that it would submit to supervision by a monitor chosen by the New York Department of Financial Services. 

If this further investigation reveals more wrongdoing, Credit Suisse is likely to settle again -- which will likely mean providing the IRS with requested information about accountholders. Anyone with offshore funds at this (or any other) bank needs to be aware of the aggressive crackdown that’s underway.  If you have offshore funds and haven't followed all tax rules in connection with those funds, there is a good chance the IRS will soon discover this. You should consult with attorney Kevin Thorn to find out what your options are for trying to protect yourself from substantial financial penalties.


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