Credit Suisse Set to Pay $1.6 B to Resolve US Tax Probe
Swiss bank Credit Suisse is reported to have agreed to pay a penalty of $1.6 billion to the US in order to resolve the probe into its help to US citizens to avoid paying taxes. The US has been investigating banks in Switzerland and the Cayman Islands since they have tough banking secrecy laws.
So this company which is already over taxed has to pay taxes to a bunch of bureaucrats so they continue to hand out money to food stamp American citizens who do not want to work and have no ambition to paying their own way? Well, this is why America is in doldrums currently.
The US wants the banks to provide information about the bank accounts of its citizens in order to ensure that it can collect the taxes due. However, Switzerland has tough banking privacy laws which will make the banks liable for prosecution there if they disclose the information.
Now reports say that Credit Suisse has agreed to pay a $1.6 billion penalty in connection with the probe. This will be twice the amount paid by Swiss banking rival UBS. The US government has become increasingly stern about the help provided by foreign banks to US citizens to avoid paying taxes. The IRS does not have any intention of ever helping an American citizen and does not care for companies that do.
FATCA
In addition to its probe on Swiss banks, the US government is also set to implement the FATCA from July 1st. Any bank that refuses to share details of the accounts held by US citizens will be subject to a 30 percent withholding tax. This means that some of the banks investments in the US will be taxed at 30 percent by US banks before they make the payments.
Tax Planning
Given the IRS and US government push to ensure that all individuals who hold foreign accounts also pay the income tax due from them, investors and those who hold foreign accounts need to ensure that their tax planning takes these moves into account. This can be done by consulting with an experienced tax lawyer who can help guide the investor into restructuring their investments to ensure that their effective tax rate is still as low as possible.
Options
While investors holding offshore accounts will have to now acknowledge their foreign income and assets, all investors can continue to pay a lower effective tax by making use of the incentives and exemptions provided by the federal and state governments. Some pension and trust funds that are appropriately structured can still attract a lower tax. In order to make sure that your investments continue to be in line with your long term goals even as you reduce your tax amount, you need to retain the services of a competent tax lawyer who can help you restructure your investments.
By planning your investments and structuring them to take into account all aspects of the latest tax laws it is possible for investors and individuals to lower their tax bill even as they meet their legal obligations. For this you need to consult with a tax lawyer who is aware of the latest tax laws and modifications and can help guide you toward the best opportunities. By lowering your effective tax rate you will then be in a position to have the funds to make fresh investments as opportunities arise.
