Has Your Swiss Bank Entered Into a Non Prosecution Agreement

1. Has Your Swiss Bank Entered Into a Non Prosecution Agreement? Freeman Tax Law Your Help Line is at: (855)935-5945 www.freemantaxlaw.com

2. What is a Non Prosecution Agreement? Swiss banks are in clean up mode and over 100 banks have opted to enter into a Non-Prosecution Agreement (NPA) with the Department of Justice (DOJ). In doing so the banks are admitting that they may have violated U.S. tax laws and will receive a lesser penalty while resolving any compliance issues. Freeman Tax Law  (855) 935-5945  info@freemantaxlaw.com  www.freemantaxlaw.com

3. What Does This Mean For Your Account? Disclosure to DOJ - As part of the NPA, banks must disclose detailed information about their American accounts including how they helped hide their assets, the total number of accounts, the highest dollar value of the account, and the employee names who managed these assets. . In many cases, the banks and financial institutions request that these forms be provided to them. The foreign banks and financial institutions are also requesting that the account holder submit an IRS Form W-9, which is generally required to be completed by U.S. customers for tax reporting purposes. Freeman Tax Law  (855) 935-5945  info@freemantaxlaw.com  www.freemantaxlaw.com

4. What Does This Mean For Your Account? • Notification - Your bank will notify you that it has entered a NPA and will request copies of your tax documentation (FBARs, 1040, and W-9 as appropriate) to verify that you were disclosing the account all along to the IRS. • No more secrecy - Due to the use of "John Doe" Summonses, foreign bank secrecy laws can no longer protect U.S tax payers. If you were not disclosing the funds in this offshore account to the IRS you need to carefully and quickly determine your options. Why did I receive this letter? The Foreign Account Tax Compliance Act ("FATCA"), is a law enacted by Congress in 2010 and effective beginning July 1, 2014. The law was enacted to identify noncompliance by U.S. taxpayers using offshore financial accounts. Under FATCA, foreign financial institutions will generally be required to comply with certain due diligence and annual reporting requirements regarding their U.S. account holders and enter into information sharing agreements with the United States. Foreign financial institutions that do not provide such information to the United States will face a penalty in the form of a withholding of 30 percent of certain U.S. source payments such as interest and dividends. Many U.S. taxpayers are receiving these letters because, in advance of the effective date of FATCA, foreign banks are undertaking the process of identifying account holders that have a U.S. tax connection. A foreign bank may find that an account holder has a U.S. tax relationship from information held by the bank such as a U.S. mailing address, a U.S. phone number, account holder birth place or the fact that upon opening the account information the bank was provided a U.S. passport, Green Card or U.S. Visa or other information indicating U.S. residence. If a foreign bank has identified an account as potentially having a relationship to United States, the institution is likely to send this letter to the account holder. Freeman Tax Law  (855) 935-5945  info@freemantaxlaw.com  www.freemantaxlaw.com

5. Cleaning Up Your Compliance Issues: Do NOT move your account to another foreign bank. There are potential civil and criminal penalties for migrated accounts and with FATCA reporting it is likely that the IRS will find out that the account has been moved causing you more challenges. What is a “Non-Prosecution Agreement” and why was it mentioned in my letter? If your account is based in Switzerland, your letter may have referenced that your Bank has entered into a “non-prosecution agreement” with the U.S. Department of Justice (“DOJ”). Basically, what this means is that the bank has agreed to participate in a program to proactively resolve potential issues that they have with the U.S. Department of Justice if they have “reason to believe” they violated tax laws of the U.S. There have been 106 banks in Switzerland that have entered into this initiative. The non-prosecution initiative requires the participating banks to disclose how they helped Americans hide assets, disclose the total number of U.S. accounts since 2008, provide their highest dollar value, and turn over the names of employees who managed these assets. The banks also must use independent examiners to certify findings to the DOJ. According to a January 26th, 2014 article in Bloomberg, “the program is the largest assault in a five-year U.S. Department of Justice crackdown on offshore tax evasion”. The price for participating in non-prosecution agreements with the DOJ is very high. Banks must pay 20 percent of the value of accounts not disclosed to the Internal Revenue Service on Aug. 1, 2008, 30 percent for such accounts opened between then and February 2009 and 50 percent for accounts opened after this date. Freeman Tax Law  (855) 935-5945  info@freemantaxlaw.com  www.freemantaxlaw.com

6. Cleaning Up Your Compliance Issues: Should I close my account and move the money? We have all heard the saying that “you can run, but you can’t hide”. There is a lot of truth to that saying in this situation. Many taxpayers; however, have chosen the path of closing the account and moving the assets. Instinctually, it is the “flight or fight” response to receiving this type letter. Transferring the funds to another foreign bank is really not a great idea. Aside from the potential civil and criminal penalties that might be imposed as a result of such actions, the implementation of FATCA has changed the way bank secrecy laws work for U.S. people around the world. U.S. taxpayers with undeclared foreign bank accounts can no longer rely on foreign assurances that they will be protected by foreign bank secrecy laws or remain undetected by the U.S. government. Foreign banks and financial institutions are being asked through U.S. Department of Justice “John Doe” Summonses to provide “account migration” information, which eventually reveals the names of U.S. account holders that have transferred assets to other banks. Simply closing a foreign account and moving the funds elsewhere is not a good option because it is likely that the U.S. government will find out about it anyway.   Seek professional help - Contact a tax professional today to help you determine the best course of action. There still may be time to take advantage of voluntary disclosure programs, but seek professional guidance. You do not want to wait for the IRS to discover your non-disclosure. Freeman Tax Law  (855) 935-5945  info@freemantaxlaw.com  www.freemantaxlaw.com

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8. Freeman Tax Law About Freeman Tax Law Freeman Tax Law is a boutique tax law firm with national exposure equipped to handle all domestic and international tax law matters. At Freeman Tax Law, the attorneys and professional staff have vast experience with foreign tax compliance, international tax planning, and resolving tax controversies involving offshore banking matters. Freeman Tax Law helps taxpayers and foreign entities become in compliance with laws such as Foreign Account Tax Compliance Act (FATCA) and Offshore Voluntary Disclosure Program (OVDP). In addition to handling complex tax controversies, the Freeman Tax Law team has extensive expertise in assisting clients with wealth management and estate planning. Freeman Tax Law (855) 935-5945 info@freemantaxlaw.com www.freemantaxlaw.com