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U.S. Mining Swiss Bank Data to Find Tax Cheats

Data coming mostly from 80 Swiss banks that participated in a limited-amnesty program

The Justice Department has begun scrutinizing thousands of U.S. taxpayers’ Swiss bank accounts to compare bank information with what the taxpayers have reported to the Internal Revenue Service.

Lawyers familiar with the government’s offshore-account programs said the Department is likely looking hardest at accounts above $1 million, or $500,000 if there is evidence the taxpayer sought to conceal them.

The data for the Justice Department’s comparisons are coming mostly from 80 Swiss banks that participated in a limited-amnesty program offered by the Department, allowing the banks to avoid criminal prosecution for encouraging U.S. tax evasion if they pressed their clients to confess the accounts, turned over detailed records, agreed to assist with investigations, and paid penalties totaling more than $1.3 billion.

The Swiss examination is allowing tax officials to spot offshore-account holders who didn’t enter the IRS’s programs or didn’t declare all their accounts.

The data could also expose people who wrongly entered another IRS amnesty for offshore accounts known as the “streamlined” program, which now has more than 30,000 participants. It is meant for Americans here and abroad who weren’t willfully breaking U.S. tax laws on foreign accounts and could apply to millions of people.

The streamlined program’s penalties are much lower.

Original Story at WSJ.