The IRS and the Department of Justice are aggressively going after banks and bankers who may have played a role in helping people in the United States evade their tax obligations. Swiss banks had a long track record of protecting client privacy, which prompted many U.S. taxpayers to put their money in offshore Swiss accounts so they could hide it from the IRS. Swiss bankers encouraged and aided in efforts to facilitate tax evasion. Now, these banks and bankers are facing prosecution and many are pleading guilty.

If you were keeping your money at a Swiss bank, you may have faced many unpleasant surprises in recent years. One of the biggest shocks to many accountholders is that the long tradition of banking privacy and secrecy is all-but-over, as one Swiss bank after another enters into non-prosecution agreements with the Internal Revenue Service (IRS) under the Swiss Bank Program.

The Offshore Voluntary Disclosure Program (OVDP) was created by the IRS in 2009 to try to convince U.S. connected individuals to voluntarily come forward and report foreign accounts which they had not declared before. Those participating in OVDP would have their penalties limited in exchange for coming forward and reporting funds, and would be provided with protection from criminal prosecution.

If you are a U.S.-affiliated person and you have accounts offshore with funds totaling $10,000 in aggregate at any point over the year, you are supposed to file an annual Report of Foreign Bank and Financial Account (FBAR). June 30, 2016 was the deadline for filing this year. Many taxpayers have discovered this requirement only recently, which left taxpayers who wanted to comply with the law wondering what their best options were.

The IRS and the Department of Justice have been on a long campaign of trying to get banks to turn over information on U.S. accountholders. A program called the Swiss Bank Program divided financial institutions into four different categories, with Category 3 and 4 banks in compliance with U.S. tax laws and Category 1 and 2 banks suspected of aiding U.S. citizens in evading tax obligations.