The Swiss divisions of BNP Paribas and Deutsche Bank AG have agreed to resolve Justice Department investigations into their role in offshore tax evasion by American customers. BNP Paribas agreed to pay nearly $60 million and Deutsche Bank agreed to pay $31 million.
More than 50 Swiss banks have now agreed to pay over $550 million to the U.S. Government as part of a voluntary program launched by the DOJ in 2013 to resolve potential criminal charges into bank conduct assisting customers with avoiding cross-border tax issues.
The penalties are the second and third largest under the program so far. BSI paid over $200 million as part of the amnesty program in a deal announced in March. The program requires them to disclose how they helped American customers avoid taxation by the Internal Revenue Service. Banks already under criminal investigation for their Swiss-banking activities were not eligible for the program.
Offshore tax evasion by international banks has produced large fines in the last decade and the largest reward under the IRS whistleblower program, a $104 million award to Bradley Birkenfeld for reporting the role of UBS in tax avoidance by American customers. The tax whistleblower law requires payments to an eligible individual of between 15 and 30 percent of the taxes, fees and penalties recovered where there is more than $2 million in dispute.
Offshore tax evasion has been a steady target of tax enforcement actions for the past decade. The latest attempt by Congress to strengthen the hand of the IRS in these matters was FATCA, which leverages banks to collect data regarding their American account holders and report that information to the IRS. If they do not comply with FATCA, they must withhold a portion of the taxpayers money for the IRS or face their own tax penalty.
If you have evidence of tax noncompliance, our tax whistleblower attorneys can assist you with reporting it to the Internal Revenue Service. Call 1-800-590-4116 or fill out our contact form for a free, confidential initial legal consultation.