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  #81  
Old 14.12.2013, 13:44
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Re: Postfinance closing American Accounts?

Postfinance blocked our accounts this week until we provide proof of "Voluntary Disclosure" to the IRS, whatever that means. I assume they just want proof we filed the FBAR, which we did. However, I don't remember any confirmations. If I do some googling, I find the "Voluntary Disclosure program (OVDI)" which seems to be for people have been not compliant for a long time, and are trying to avoid stiff(er) penalties. Not our case.

Not sure if PostFinance is saying we have to enter this program or simply provide proof of FBAR filing because my wife spoke with them on the phone. I will have to follow up Monday.

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Old 14.12.2013, 13:49
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Re: Postfinance closing American Accounts?

I got a letter from postfinance about the voluntary disclosure program in the mail a couple weeks ago, but if I understood the letter correctly, it was just suggesting that US citizens who are not tax compliant (in the US) to use the program to resolve their tax issues.

Any chance PF would think you aren't tax compliant?
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  #83  
Old 14.12.2013, 13:57
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Re: Postfinance closing American Accounts?

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I got a letter from postfinance about the voluntary disclosure program in the mail a couple weeks ago, but if I understood the letter correctly, it was just suggesting that US citizens who are not tax compliant (in the US) to use the program to resolve their tax issues.

Any chance PF would think you aren't tax compliant?
We got the same letter. It also "suggested" we should be tax compliant (we are) by the 9th of Jan. Then, they proceeded to block our account without notification.

I don't know what would give them reason to think we are not compliant.
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Old 14.12.2013, 16:08
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Re: Postfinance closing American Accounts?

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Postfinance blocked our accounts this week until we provide proof of "Voluntary Disclosure" to the IRS, whatever that means. I assume they just want proof we filed the FBAR, which we did. However, I don't remember any confirmations. If I do some googling, I find the "Voluntary Disclosure program (OVDI)" which seems to be for people have been not compliant for a long time, and are trying to avoid stiff(er) penalties. Not our case.

Not sure if PostFinance is saying we have to enter this program or simply provide proof of FBAR filing because my wife spoke with them on the phone. I will have to follow up Monday.

maddening
OVDI is only for tax cheats. If you intentionally cheated on US taxes, then OVDI is for you. If not, then OVDI is not for you. If you join OVDI, you'll be treated like a "tax cheat" and will go through hell if you are innocent. This could cost you $20'000 or more with no tax due on legal fees and penalties. FBAR penalities for not filing only applies to people who enter OVDI. The US claims that the FBAR fines are for the big fish and to go after money laundering.
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Old 14.12.2013, 16:51
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Re: Postfinance closing American Accounts?

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Postfinance blocked our accounts this week until we provide proof of "Voluntary Disclosure" to the IRS, whatever that means. I assume they just want proof we filed the FBAR, which we did. However, I don't remember any confirmations. If I do some googling, I find the "Voluntary Disclosure program (OVDI)" which seems to be for people have been not compliant for a long time, and are trying to avoid stiff(er) penalties. Not our case.

Not sure if PostFinance is saying we have to enter this program or simply provide proof of FBAR filing because my wife spoke with them on the phone. I will have to follow up Monday.

maddening
"Voluntary disclosure" is a bad choice of words because it confuses with OVDI, as happened to you. OVDI is a mitigated forfeiture scheme of the IRS of which there have been several versions. It was intended (under Congressional mandate) that it would target cases of major noncompliance. However because of poor understanding in Congress of the issues and hostility towards expats generally, even minor discrepancies are disproportionately punished.

And you cannot expect to approach an accountant or lawyer in the US or UK without being encouraged (as his/her "professional ethics" rules mandate) to go into this expensive and emotionally devastating procedure.

What the Government Accountability Office found in its research is that of the millions (nobody knows how many; American Citizens Abroad claim 6 million-plus and the State Dept accepts that figure, but it really is totally arbitrary and those promulgating such a number have a vested interest) of US citizens abroad only a few hundred thousand file tax returns (but of course that includes joint returns, persons married to aliens, and children).

The penalties for small underpayment of tax are minor. The penalties for non-declaration of foreign accounts where the total value exceeds $10,000, of foreign trusts (including "Stiftungen" and "Anstalten" (foundations) and civil-law fiduciary relationships) and foreign corporations are draconian.

The IRS look-back period is generally 6 (or for OVDI, 8) years. But technically major underpayment of tax, non-filing and "absconding" from the USA have no statute of limitations.

That said, what PostFinance and other Swiss banks want, in the shadow of FATCA (the US law, now more or less accepted by Switzerland by treaty) where foreign financial institutions were threatened with 30% withholding of US income and seizure of correspondent assets if they did not cooperate is this: US persons must file Form W-9 and a consent form to reveal past and present account information to the IRS.

The EU has a vaguely similar project with Switzerland and UK residents and some UK citizens resident in Switzerland have received notices from HMRC to declare their Swiss accounts. Google "SA106" and see http://www.scribd.com/doc/191496288

Like the IRS, HMRC is starting from the standpoint that everybody has criminal intent. In fact that's not just nasty but wrong. Most US Persons will have satisfied their US foreign account declaration obligation by checking the box at the foot of Form 1040 Schedule B.

Many US taxpayers are choosing to file and declare only "going forward". There is chatter on the Internet, in professional forums, in GAO reports and within the IRS about investigating prior tax returns of those filing FBARs and (now) Form 8938. The real issue is whether taxpayers (especially US residents) are hiding funds abroad they never declared to the IRS when they earned them or made capital gains.

Given that the legal costs of OVDI (assuming one doesn't do it him/herself) run upwards of $25,000 and the various penalties based on foreign account balances and, bizarrely, sometimes on foreign assets and real estate too, can be in the hundreds of thousands of dollars and can involve assets of a non-American spouse and children, some (especially dual nationals) are choosing to do nothing. Those without assets, income or heirs in the USA, assuming they do not apply for a new passport and never go to the USA (the IRS has access to the EPIC database and can follow the travel of target noncompliant persons), are probably beyond reach. Swiss banks will generally not know that a Swiss citizen depositor is a US person unless told, since Swiss ID cards don't bear "place of birth".

I understand from online chatter that many US and UK (and other) account holders, Swiss dual citizens, green card holders and others, are changing banks. Often by carrying their account balances in cash. It's not only demands of the sort you received but revelation about US Government access (via the NSA especially) to foreign databases that have people frightened and anxious about paper trails. But as I said, most people are in fact compliant; the problem is that even minor noncompliance can lead to disproportionate penalties and expensive legal fees.

Remember this: your conversation with an accountant is not privileged. Your exchanges with a lawyer, and through the lawyer via a "Kovel letter" to an accountant, are usually privileged unless used for further violation of law.

I hope that helps. Feel free to send a direct message if you have further questions. I an a retired academic in this area of tax law.
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  #86  
Old 14.12.2013, 16:53
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Re: Postfinance closing American Accounts?

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Postfinance blocked our accounts this week until we provide proof of "Voluntary Disclosure" to the IRS, whatever that means. I assume they just want proof we filed the FBAR, which we did. However, I don't remember any confirmations. If I do some googling, I find the "Voluntary Disclosure program (OVDI)" which seems to be for people have been not compliant for a long time, and are trying to avoid stiff(er) penalties. Not our case.
Do PostFinance have you listed as a US Person? In our case, we got a similar letter (from a different bank) which basically said "we've been notified that your account number XXXXXX has been flagged by the IRS as belonging to a US person" and asking me to prove that the account had been disclosed.

In fact, I assume that the reason the IRS had this flagged as belonging to a US person was that I had disclosed it on my FBAR and form 8938. At some point, the bank must have been notified -- but since I was not listed as a US person in their system, they could not be sure whether the account was declared or undeclared. So they asked me to provide documentary evidence to substantiate it had been declared.
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  #87  
Old 14.12.2013, 17:26
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Re: Postfinance closing American Accounts?

I got the same letter from PF last week so I sent off a copy of my CLN and the Streamlined Questionnaire that I did with my FBAR's to show I was becoming compliant. Will wait to here if they come back to me on it. As far as I know the account isn't blocked, but we don't use it except for paying out the monthly Swiss tax bill.
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  #88  
Old 14.12.2013, 18:58
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Re: Postfinance closing American Accounts?

I got the same letter here, but it did mention I could ignore it if I was already compliant. I haven't been blocked yet - but that may be because I've only had an account for a little over a year or so. I had to sign a bunch of extra papers, and my balance has never met fBar req levels yet.


Edit: I should note, that the letter I received didn't give any date when I should be tax compliant. Merely if I were participating in the VD program to let them know by email.

Last edited by Wisescarab; 14.12.2013 at 19:28.
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  #89  
Old 15.12.2013, 13:32
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Re: Postfinance closing American Accounts?

This is on PostFinance's website, dated 13.Dec.2013. Can anyone translate this into English?

PostFinance to take part in US program


PostFinance has decided to join the program to settle the tax dispute with the US. It will register as a Category 2 participant with the Department of Justice (DOJ) by the deadline at the end of December. PostFinance will keep the option open to apply for a "non-target letter" in accordance with Category 3 at a later time.

The decision to opt for Category 2 is based on the current uncertainty concerning PostFinance's eligibility for Category 3. It is also unclear to what extent PostFinance's unique business model with its universal service obligation for payment transactions is taken into consideration within the scope of the program. With this approach, PostFinance wishes to minimize the risk of coming into conflict with foreign authorities for the company, for its customers and for its employees. If it should decide to change to Category 3, it will do so between 1 July and 31 October 2014.
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Old 15.12.2013, 13:55
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Re: Postfinance closing American Accounts?

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This is on PostFinance's website, dated 13.Dec.2013. Can anyone translate this into English?

PostFinance to take part in US program


PostFinance has decided to join the program to settle the tax dispute with the US. It will register as a Category 2 participant with the Department of Justice (DOJ) by the deadline at the end of December. PostFinance will keep the option open to apply for a "non-target letter" in accordance with Category 3 at a later time.

The decision to opt for Category 2 is based on the current uncertainty concerning PostFinance's eligibility for Category 3. It is also unclear to what extent PostFinance's unique business model with its universal service obligation for payment transactions is taken into consideration within the scope of the program. With this approach, PostFinance wishes to minimize the risk of coming into conflict with foreign authorities for the company, for its customers and for its employees. If it should decide to change to Category 3, it will do so between 1 July and 31 October 2014.
We're not sure yet that our company/business model fits category 3 so will declare as category 2. If we find out otherwise in future we'll change categories.
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  #91  
Old 15.12.2013, 14:01
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Re: Postfinance closing American Accounts?

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This is on PostFinance's website, dated 13.Dec.2013. Can anyone translate this into English?

PostFinance to take part in US program


PostFinance has decided to join the program to settle the tax dispute with the US. It will register as a Category 2 participant with the Department of Justice (DOJ) by the deadline at the end of December. PostFinance will keep the option open to apply for a "non-target letter" in accordance with Category 3 at a later time.

The decision to opt for Category 2 is based on the current uncertainty concerning PostFinance's eligibility for Category 3. It is also unclear to what extent PostFinance's unique business model with its universal service obligation for payment transactions is taken into consideration within the scope of the program. With this approach, PostFinance wishes to minimize the risk of coming into conflict with foreign authorities for the company, for its customers and for its employees. If it should decide to change to Category 3, it will do so between 1 July and 31 October 2014.
In plain English, it says that PostFinance wants to celebrate a new permanent status of "tax cheat" so that it can donate all of the money of its clients to kindly support reckless spending in the US and anti-Swiss racism. In return, the US will liquidate the bank before placing it into category 3, to scare the world into FATCA compliance by demonstrating that the innocent will not be tolerated.
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  #92  
Old 15.12.2013, 15:51
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Re: Postfinance closing American Accounts?

A "plain English" description of the categories is here: http://tinyurl.com/ps9foxf (From PwC)
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  #93  
Old 15.12.2013, 20:48
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Re: Postfinance closing American Accounts?

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...PostFinance has decided to join the program to settle the tax dispute with the US. It will register as a Category 2 participant with the Department of Justice (DOJ)...
Their going for Category 2 plus their apparently requesting tax ID numbers from their US customers (can anybody here confirm this?) strongly suggests (IMHO) they'll be voluntarily handing over all their US customers to the US govt on a silver platter regardless of how much or how little money they have on deposit. That wouldn't be a big deal if it weren't for the US govt's history of routinely presuming folks to be guilty (and arbitrarily exacting fines and penalties) until they prove their own innocence, often at substantial personal expense.
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Old 15.12.2013, 21:26
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Re: Postfinance closing American Accounts?

Texaner,

I'm an American with a PF account and haven't heard anything from them regarding my tax information (so, data point of 1 says they aren't requesting this information).
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Old 15.12.2013, 21:38
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Re: Postfinance closing American Accounts?

No, my letter didn't mention needing my tax number and I had the OH block it digitally out for me on the questionnaire copy I sent in with my CLN.
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Old 15.12.2013, 21:40
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Re: Postfinance closing American Accounts?

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I'm an American with a PF account and haven't heard anything from them regarding my tax information (so, data point of 1 says they aren't requesting this information).
Thanks for that input. Maybe I'm just hearing about some rare cases. Please let us know if/when a tax information request does show up.

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No, my letter didn't mention needing my tax number and I had the OH block it digitally out for me on the questionnaire copy I sent in with my CLN.
I was actually referring to folks who are still US citizens. I would expect them to interact differently with former US citizens.
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Old 15.12.2013, 22:19
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Re: Postfinance closing American Accounts?

as individual US tax payer it comes down to what you declare on the Form TD F 90-22.1.
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  #98  
Old 16.12.2013, 11:41
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Re: Postfinance closing American Accounts?

Meanwhile, Raiffeisen says stuff it:

http://www.swissinfo.ch/eng/business...l?cid=37537948

Tom
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Old 16.12.2013, 11:55
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Re: Postfinance closing American Accounts?

I have no news from Post Finance regarding
my US account....

Funny thing though..... They would not issue me US dollars
that I wanted to use on my vacation in Tanzania.
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Old 18.12.2013, 11:47
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Re: Postfinance closing American Accounts?

A short update...

It all started with a letter that my wife read to me over the top of noisy kids while I was trying to cook dinner...

Wife: We got a letter from PostFinance today saying something about disclosing our accounts to the IRS.
Me: What does it say?
Wife: Something about that they recommend that we participate in a "voluntary disclosure program". It says we should email them if that we do.
Me: We file FBARs, pay taxes, and disclose everything, so I guess just email them saying we do.
Wife: OK. Done. I told them we "voluntarily disclose" everything.

Couple days later we find that our accounts have been blocked until we provide proof of our enrollment into the "Voluntary Disclosure Program".

After digging out the original letter, it says this:

...snip...
We recommend to all our clients who are US taxpayers to be fully tax compliant and, if you are not tax compliant, we strongly recommend to participate in a voluntary disclosure program (the "VD Program") put in place by the US-Internal Revenue Service for non tax-compliant US clients.
...snip...

So, obviously, as we are tax compliant, and have filed our FBARs, we should have done nothing.

As of now the accounts are still partially blocked, even though we have informed them that we DO NOT, in fact participate in this program.

Needless to say, this is frustrating.

Last edited by alanbrito; 18.12.2013 at 11:47. Reason: fonts
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