Wednesday, August 5, 2009
Swiss Banks and the IRS
"In a sign that UBS AG's high-profile spat with the [IRS] is chipping away at Switzerland's private banking industry, some Swiss banks are cutting off or curbing business with American clients for fear of crossing US authorities. A number are no longer accepting deposits from US-based customers, or allowing them to open accounts. ... The battle has made some banks in Switzerland see clients based in the USD-regardless of nationalitiy--as an expensive liability. ... For American citizens, who are taxed by the US government on all world-wide income, regardless of its origin, Swiss banks don't offer obvious legal tax advantages. ... Over the past several weeks, Zurich-based retail bank Zurcher Kantonalbank decided to no longer accept business from US cloients, a spokesman said", Katharina Bart at the WSJ, 21 July 2009, link: http://online.wsj.com/article/SB124812576770166239.html.
Why the big push to stop Americans from holding money in Swiss banks? Is it to reduce tax evasion? Or should we don our tin foil hats and expect the 1963-74 Interest Equalization Tax to return, and Treasury figures it will be easier to enforce such tax if Americans hold no money abroad? Stay tuned.