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These days, there's a lot of speculation about international private banking and the way international banks may be used by United States citizens to hide certain assets and to possibly evade paying income taxes. Swiss banks in particular, are well-known for their often secret privacy banking laws.
Swiss banks take banking privacy very seriously, and believe that bank clients that are not engaged in illegal activities or fraudulent schemes should be able to enjoy banking services without other individuals, entities or even governments knowing about them. However, the issue of secrecy and privacy in some banks, like the ones in Switzerland, is a problem for many governments -- including the United States government.
Reasons People Choose Private Swiss Banks
For the most part, American citizens utilize secret Swiss bank accounts simply to protect their hard-earned assets from a potential lawsuits or costly litigation. Many liability lawsuits can wipeout the savings and earnings that someone has amassed over a lifetime.
Therefore, many American citizens choose to deposits varying sums of money in secret Swiss bank accounts to make locating those assets harder for people contemplating litigation against them. Generally speaking, people are a lot less likely to sue someone - if there are not sufficient monies and assets readily available to seize.
So, many people wisely hide a portion of their assets away in countries like Switzerland and other countries with strict banking privacy laws.
Swiss Banks - The Potential for Tax Fraud
While most people that deposit money in Swiss bank accounts, or place assets with Swiss investment banks, do so to simply protect their assets from potentially costly lawsuits, most of them do not do so with the intent of evading personal income taxes. However, there are some individuals that use Swiss bank accounts to attempt to hide funds from everyone, including the US government.
While it is difficult to determine is how many people have used international banks to hide money and assets from the US government, the IRS recently stated that it could be as many as 100,000 individual taxpayers. If this is the case, then the United States is being deprived of much-needed revenue that could be used to pay down the national debt or provide better infrastructure or services to the taxpayers.
Recently, the IRS has begun actively pursuing would be tax cheats that use secret bank accounts in Switzerland and other countries. This has caused some tension between the United States government and Switzerland. On one hand, the United States wishes to find out who is depositing money into Swiss Bank accounts, so that they can determine who is using these accounts to avoid paying income taxes. On the other hand, Switzerland is determined to promote data privacy and secrecy laws associated with Swiss bank accounts.
The Swiss government feels that if it allows the American government to pierce the veil of secrecy associated with Swiss Bank accounts, the results would be a massive withdrawal of funds from Switzerland Swiss bank accounts -- by depositors from all over the world.
