The Swiss institution, Banque Pictet, has admitted to helping U.S. taxpayers hide billions in undisclosed accounts.
With a strong mandate to identify and remedy tax evasion of U.S. taxpayers in the global banking system, the Internal Revenue Service (IRS) has again bagged a Swiss financial institution for helping hide billions in taxable assets.
In early December, the IRS announced 218-year-old Banque Pictet agreed to enter a deferred prosecution agreement for waiving pixie dust over 1,637 bank accounts to make them disappear. The customer service efforts taken by the bank on behalf of its American account holders were impressive and read as a primer in how financial entities help their account holders avoid taxes (albeit illegally). Some of the services carried out by the bank between 2008 and 2014 included:
- The bank maintained undeclared accounts for offshore tax entities that were formed by others on behalf of U.S. clients.
- Mail services offered to account holders included holding mail for clients at the bank rather than creating a stateside paper trail.
- The bank transferred funds from undeclared accounts of U.S. taxpayers to those of non-U.S. holders through fake donations. This dodge allowed the U.S. taxpayer to continue holding monies offshore and undeclared.
- In an old-time scam, similar to Mossack Fonesca, the prime actor in the Pandora Papers, Banque Pictet formed offshore tax companies that held accounts for U.S. clients. The accounts were not always declared, allowing U.S. clients to fly under the regulatory radar.
- By the numbers, the bank helped its American clients avoid approximately $50.6M in taxes on accounts that held $5.6B in assets.
For its stay-out-jail-free card, the bank will pay a fine of $122M and admitted to “conspiring” with U.S. account holders to help them avoid their U.S. taxes. As part of its deferred prosecution, the bank was required to accept responsibility for its conduct and cooperate with ongoing investigations. If the bank plays nice, the U.S. will defer prosecution for three years and then dismiss charges against the bank.
Offered IRS:CI Chief Jim Lee, “Offshore tax evasion is a priority for IRS Criminal Investigation, and today’s deferred prosecution agreement with Bank Pictet collects more than $120 million owed to the U.S. government.”
The IRS chalks up a win once again on pursuit of tax fraud around foreign bank accounts. If you are concerned about the compliance of your offshore investments, speak with an experienced tax lawyer.
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Robert J. Fedor, Esq., LLC offers strategic legal guidance to clients throughout the U.S. and abroad on IRS audits, criminal tax investigations, and employment tax disputes. When you have questions about individual or business tax compliance, call us at 800-579-0997 or contact us. We have offices in Cleveland and Chicago.
