After a showdown between the upper and lower houses of the Swiss Parliament, the Parliament has ratified the US-Swiss agreement providing for the release of US accountholder information on about 4500 accounts. See Taxpayers may have 'mere hours' to reveal UBS accounts, Bloomberg.com, June 17, 2010 (at 5 pm). Ratification was required because of a Swiss court decision in January, which determined that the agreement violated Swiss law. Ratification had stalled in Parliament, where the upper house ratified the US-Swiss agreement for release of thousands of UBS accountholders' information to the US, but the lower house balked and then insisted on requiring a public referendum on the issue. Under deadline pressure however--the parliamentary session ends tomorrow, and any referendum would have extended well beyond the deadline under the agreement for handing over the information--the Swiss buckled under and both houses ratified the agreement without requiring a referendum.
It is likely that the names will start flowing very soon, which moves the ball back to the US. The voluntary disclosure program that provided some assurance of limited penalties has ended. But voluntary disclosure may still be the better decision for anyone who might be among the revealed accounts. Not only are the penalties for nonreporting rather draconian, since multiple year failure to disclose can lead to multiple year penalties that well exceed the amount in the account, but there is a potential for civil and criminal charges. A taxpayer who comes forward may be able to forestall the worst, but a taxpayer who is discovered without having come forward likely will get little leniency.
The Bloomberg.com article noted above quotes fellow tax lawyer and ABA Standards Committee officer Scott Michel (Caplin & Drysdale, DC) who got two calls today from panicked taxpayers hoping to be able to disclose accounts before the IRS gets their name. May they scramble quickly--perhaps it will not only save them some of the money in their account but also teach them some much-needed humility.
This is a significant victory for the US, and hopefully,, together with FATCA's passage, the beginning of the death knell for banks in banking secrecy jurisdictions serving as accommodation parties to US taxpayers' evasion of taxes.
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