IRS Starts Scrutinizing the Insurance Industry with Swiss Partners

In accordance with the DOJ Swiss Banking deal, Swisspartners, a group of Swiss asset management and life insurance companies (which, among its other insurance products, provided customized private placement life insurance polices to US persons) agreed to resolve a US criminal tax investigation. Specifically, Swisspartners Investment Network AG, a Swiss-based asset management firm, and three of its wholly-owned subsidiaries (collectively, the Swisspartners Group), entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Southern District of New York and agreed to pay $4.4 million to the United States. The NPA was entered into based on, among other things, the Swisspartners Group’s remedial measures, voluntary self-reporting and extraordinary cooperation, including its voluntary production of approximately 110 client files for non-compliant U.S.-taxpayer clients, and provides that the Swisspartners Group will not be criminally prosecuted for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 through 2011.