Throughout the world, there are certain countries which developed a reputation for keeping financial accounts private. Many people chose to bank in these countries in order to maintain more privacy regarding their investments and finances.  In some cases, offshore accounts were also used by accountholders to avoid 100 percent compliance with tax obligations. 

Throughout the world, countries are trying to fight tax evasion and are making new efforts to use every possible resource to catch people who have made efforts to evade their tax obligations. From countries exchanging information on accountholders while discarding longstanding bankruptcy privacy laws to taxing authorities going after banks and bank executives, no stones are being left unturned in an effort to collect all possible revenue.

The IRS and the Department of Justice are aggressively going after banks and bankers who may have played a role in helping people in the United States evade their tax obligations. Swiss banks had a long track record of protecting client privacy, which prompted many U.S. taxpayers to put their money in offshore Swiss accounts so they could hide it from the IRS. Swiss bankers encouraged and aided in efforts to facilitate tax evasion. Now, these banks and bankers are facing prosecution and many are pleading guilty.

If you were keeping your money at a Swiss bank, you may have faced many unpleasant surprises in recent years. One of the biggest shocks to many accountholders is that the long tradition of banking privacy and secrecy is all-but-over, as one Swiss bank after another enters into non-prosecution agreements with the Internal Revenue Service (IRS) under the Swiss Bank Program.

The Offshore Voluntary Disclosure Program (OVDP) was created by the IRS in 2009 to try to convince U.S. connected individuals to voluntarily come forward and report foreign accounts which they had not declared before. Those participating in OVDP would have their penalties limited in exchange for coming forward and reporting funds, and would be provided with protection from criminal prosecution.