When UBS AG made a public announcement in August of 2008 that it was under investigation by United States authorities, many of its banking customers took their accounts elsewhere. One of the places they took the accounts to was Finter Bank, a Zurich based bank.  After August 2008, Finter Bank had an estimated 283 accounts linked to U.S. accountholders. These accounts had an aggregate minimum balance equal to approximately $235 million.  

The Chief of the IRS Criminal Investigations Division was recently quoted as saying: “Fighting offshore tax evasion continues to be a top priority for IRS-CI and we will trace unreported funds anywhere in the world.”  The quote was in response to a March 2015 agreement reached between the United States Department of Justice and one of the 10 largest private banks in Switzerland.  The agreement was reached through the Swiss Bank Program started by the DOJ and announced on August 29, 2013. 

Following a recent settlement with Commerzbank AG in which the bank paid more than a billion dollars in penalties and fines, the Assistant Attorney General stated: “Financial institutions must heed this message:  banks that operate in the United States must comply with our laws, and banks that ignore the warnings of those charged with compliance will pay a very steep price.”

U.S. citizens must report all income to the United States, even if that income is kept in accounts outside of the country. Anyone who has an offshore account is required to file an annual Foreign Bank Account Report (FBAR) to alert the treasury department to the fact that the account exists at a foreign bank.  If income is earned on offshore investments, taxes must be paid on it. 

Authorities are already convinced of the need to aggressively go after investors who may be hiding money offshore in order to avoid full compliance with tax obligations.  Estimates indicate that around $7.6 trillion in wealth is held in offshore accounts, depriving governments worldwide of around $200 billion in unpaid income tax revenue.