Curbing Tax Evasion through Offshore Bank Deposits in Swiss Banks:

A High Priority for the Obama Administration

B. Anthony Billings, PhD, and William H. Volz, JD, MBA, and Antonié W. Y. Walsh, JD, LLM

In BriefThe article highlights the rare success of the U.S. government in addressing the problem of tax evasion through offshore bank deposits by negotiating with the Swiss government. Tax evasion by Americans through offshore bank deposits in Switzerland has been on the radar of the U.S. Justice Department for some time now. An important milestone occurred in 2009 when Union Bank of Switzerland (UBS) paid $780 million in fines after being convicted of helping wealthy Americans evade U.S. taxes. Consistent with its obligations under a bilateral agreement, the Swiss government recently proposed legislation that would have substantially expanded the data available to U.S. government investigators. When the Swiss parliament rejected the legislation, the Swiss government pressed forward through administrative action. The effect of these new rules can be seen in the case of Credit Suisse AG, which was indicted by the U.S. Justice Department and, to avoid much harsher penalties, settled for $2.6 billion.