The Internal Revenue Service (IRS) has requested more information from Wegelin & Co. about its U.S. clients. The defunct Swiss bank confirmed the request, saying that it has received notification from U.S. tax authorities to cooperate with the investigation into tax evasion.
IRS Continues to Investigate
Switzerland’s oldest bank is no longer in business after its indictment in the United States. The IRS is still digging into the bank for more information about its American customers. The latest report focuses on Wegelin clients who were the beneficiaries of several asset management companies between 2002 and 2012. They are suspected of tax evasion and fiscal fraud. Though the request was filed by the IRS, the U.S. Justice Department has the responsibility of dealing with Swiss banks that have violated U.S. law.
Just a few months ago, Wegelin pleaded guilty of helping its U.S. clients dodge taxes. Wegelin now has only a few employees in Switzerland who are working to wind down the bank’s remaining U.S. business. Most of its healthy businesses have already been sold off. John Letzing of the Wall Street Journal approached the Swiss Federal Tax Administration for comments, but the Swiss regulator’s spokesman declined to comment. Swiss Federal Tax Administration has the responsibility of administering such requests.
Switzerland to Pass a Bill
The IRS has the right to make such requests to Swiss banks because of the 1996 tax treaty between Switzerland and the United States. It’s the fourth such request by the IRS to a Swiss banking institution. Last month, Julius Baer Gruppe AG said that it has also received a similar request from the IRS to provide customer data. Credit Suisse Group AG (NYSE:CS) (VTX:CSGN) also received a similar request in 2011. But a Swiss court decision had blocked that decision.
The Swiss parliament plans to pass a bill that will allow all Swiss banks to start providing data to the U.S. Justice Department about their American clients who evade taxes using Swiss accounts. Upper House of the Parliament has already approved the bill. The lower house is expected to vote next week.