Swiss Banks with US exposure are rejecting US customers who reside i the USA and cancelling mortgage offers. 2 buyers at the National de Montreux may lose their deposits b/c finance offers withdrawn by BCV (with no US presence). For UBS/Crédit Suisse one issue is having IRS seize assets out of US branch, while foreign law requires non-US branch to repay depositor: http://uniset.ca/other/cs6/68OR2d379.html

Foreign residents who are US persons can still get banking (after all UBS has a branch in the US Mission to the UN for American staff, and provides lease guarantee accounts for them). But such business is centralised in a few branches, notably Geneva for UBS.

"Accidental Americans" whose "functional nationality" is Swiss are treated like any other Swiss. On the other hand knowledgeable bankers would keep them abreast of the W-9 and QI pitfalls. While not sophisticated enough to address the ineligibility for mutual-fund status of local pension and investment vehicles. The new tax protocol should end the tax anomaly of Third Pillar -- but not relieve savers of form 3520 reporting (or perhaps a special form like simplified 8891, used for Canadian plans).

What I am anxious to see is how the IRS deals with innocent, naive, lower-middle-class earners who cannot possibly fullfil the foreign asset reporting forms properly and can't afford professional help. I've given volunteer assistance for years but as the reporting rules become more onerous and the penalties more draconian, I'm seeing refusals to comply and a psychic withdrawal from everything American.

My normal counsel had been to qualify for Medicare and minimal Social Security by contriving subject earnings for ten years. Some, today, just want to stay below the radar and "wait for the xenophobic penalty system to implode".

There is, after all, a difference to a US-resident with no real foreign connection who opens a sham business in Liechtenstein or the Caymans and spends untaxed trading profits and investment gains via a foreign-basede debit card (these transactions are all monitored trend-wise now; and all MasterCard and VISA transactions are converted to dollars en route to a third currency; SWIFT transactions are likewise accessible to Treasury.) The difference is to "accidental Americans" and permanent expatriates who have no US dollar assets.

Counseling such persons involves analysing whether they are genuinely free of actual or potential US assets and rights, and whether they are in the line of inheritance from or to a US person. Careless planning means that Stiftung or Anstalten assets can be 100% consumed by tax very easily.

I say this because the occasional (ignorant) demands for repeating the Carter elimination of the foreign earned income exclusion guarantees hardship, hostility, loss of allegiance, and unintended criminality.

One should look at why the Philippines abandoned the worldwide income taxation scheme imposed on its citizens (then US protégés) by the Income Tax Act of 1913. Following gross devaluation of the peso and the imposition of the highest rate of tax on simple domestic workers abroad, the tax on Filipino expats was abolished in 1999. It made no sense to keep a tax where everybody was (out of financial necessity) cheating.