Here’s a clear message for ultra-wealthy Americans who have been having bad dreams for years now that center on IRS and DOJ agents combing through the files of European financial institution for evidence of tax evasion: blissful nights of uninterrupted sleep are not yet on the imminent horizon.
Many people think that FATCA (Foreign Account Tax Compliance Act) probes into the overseas holdings of American citizens have been progressively winding down in recent years.
Notwithstanding some stories that emphasize the agreements reached between American authorities and foreign companies that have stored wealth for expatriates and U.S.-based residents, the fact remains that FATCA investigations continue largely uninterrupted.
And even with enhanced vigor. A recent Reuters report notes that U.S. prosecutors “have been widening their probe of Swiss banks” recently, with investigatory efforts now going beyond bank scrutiny to further encompass transactions between American clients and Swiss insurance companies.
The stated concern of regulators is most centrally on so-called “insurance wrapping,” a strategy pursuant to which “the very wealthy can place stocks, private equity holdings and other bankable assets” into untraceable — and, importantly, untaxed — portfolios.
It is key for affected policyholders to duly note that criminal investigators are now, well, tracing the untraceable, looking for evidence of unlawful tax avoidance linked with insurance wrappers.
Swiss Life — Switzerland’s largest life insurance company — is prominently highlighted in the current investigatory efforts. Principals at that company recent stated that all its insurance contracts “have been categorized and reported pursuant to the FATCA legislation.”