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Swiss Bank Julius Baer Receives IRS Information Request
Author: Scarinci Hollenbeck, LLC
Date: June 7, 2013
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Julius Baer, Switzerland’s third-largest wealth manager, recently informed a number of American clients that the details of their accounts may receive an IRS information request. The Swiss bank noted that many of its American clients’ accounts fall in line with the tax evasion probing criteria outlined by the IRS, and therefore must be disclosed to the U.S. government.
While the IRS has been hesitant to disclose any information on its probe into the accounts, a spokesperson for the Zurich-based bank said that the request is in accordance with a double-taxation agreement between the U.S. and Switzerland that has been in place since 1996. However, the representative would not detail how many Americans are suspected of skirting their federal tax law obligations. The agency is currently looking at accounts that were opened or maintained by the bank between 2002 and 2012.
“The Swiss government is taking a broad interpretation of the treaty to allow the handover of data in cases involving offshore structures,” Milan Patel, a former IRS trial attorney, told Bloomberg. “The banks seem willing to oblige to show they are cooperating with the U.S. once the Swiss government approves the turnover to avoid any violation under Swiss banking secrecy.”
Julius Baer is one of 14 Swiss banks included in a U.S. Department of Justice investigation, which is focused on determining the banks’ complicity in helping U.S. clients evade their taxes through the use of offshore accounts. Many Swiss institutions have shied away from conducting business with wealthy American clients since the $780 million agreement between the U.S. and UBS AG, in which the bank admitted to helping U.S. clients circumvent federal tax laws, according to MarketWatch. Most recently, Switzerland’s oldest financial institution, Wegelin & Co., pleaded guilty in a Manhattan federal court to helping countless American clients conceal more than $1.2 billion from the IRS. The bank has since closed.
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