Swiss Bank Program Sees Final Resolutions

On December 29, 2016, the Justice Department announced that it had reached the final resolutions under the Swiss Bank Program. The Swiss Bank Program was put in place after a massive tax evasion scheme at Swiss bank UBS was exposed by Bradley Birkenfeld. The former international banker and wealth manager with UBS recently released Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy detailing his journey as he took on the Swiss banking industry.

Mr. Birkenfeld was the first international banker to blow the whistle on illegal offshore accounts held in Switzerland by U.S. Citizens. His exposures resulted in unprecedented recoveries for the U.S. taxpayers. The recoveries include $780 million dollars in civil fines and penalties paid by UBS bank, and over $5 billion dollars in collections from U.S. taxpayers who had illegally held “undeclared” offshore accounts in Switzerland and other countries.

In 2012, the IRS awarded Mr. Birkenfeld $104 million for his disclosures which revealed the secrets of the Swiss banking system. This historic award is the largest ever given to an individual whistleblower in the twenty-five-year history of federal qui tam or whistleblower reward laws. The award was obtained by Kohn, Kohn & Colapinto attorneys after three years of litigation before the IRS Whistleblower Office and recognized Mr. Birkenfeld’s numerous contributions to the public interest.

In a 2014 speech, IRS Commissioner John Koskinen explained the impact of Mr. Birkenfeld’s contributions reached much further than the 780 million dollar fine UBS received. Per Commissioner Koskinen, “Since 2009, these programs have resulted in more than 43,000 voluntary disclosures from individuals who paid more than $6 billon in back taxes, interest, and penalties, and the numbers continue to rise.”

“Offshore compliance remains an important area of tax administration,” said IRS Large Business & International Division (LB&I) Commissioner Douglas O’Donnell, regarding the final resolutions under the Swiss Bank Program. “We are evaluating incoming information to detect accountholders who have evaded reporting overseas assets and income, and we are using this information to further untangle the web of financial institutions and intermediaries helping with this evasion. We have expanded our investigations to other regions of the world, and we will continue to apply these techniques to help protect honest taxpayers.”

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