Swiss Banks Battle Undeclared Accounts
Before he died in 1980, Maurice Pinot set up a Swiss bank account with 1 million francs ($1 million). For decades, the account paid out dividends and interest to Mr. Pinot’s longtime companion, and after her death, to her daughter, Micheline Fournie, a French citizen with a U.S. residency permit.
Now, Ms. Fournie is locked in a dispute with the bank that holds the account, which is urging her to declare it to the U.S. Internal Revenue Service.
The spat illustrates a thorny issue for Swiss banks. They are eager to shed undeclared American accounts, but Switzerland’s bank-secrecy laws mean they can’t easily open up their records to U.S. authorities. The result: Many have been saddled with a batch of accounts by clients who have refused to declare them. Now, they must soon be disclosed to the IRS thanks to recently implemented U.S. law.
Swiss banks in a U.S. Justice Department self-reporting program have pushed clients to disclose their accounts, sometimes offering them financial incentives to do so. Separately, about a dozen Swiss banks are under Justice Department investigation for allegedly aiding tax evasion through undeclared accounts.
Original Story at The Wall Street Journal