Skip to Main Content
 

Scott Michel Comments on Attorney Confidentiality FATCA Exemption

March 1, 2016, Daily Tax Report

Scott D. Michel  spoke with Daily Tax Report concerning an agreement between Switzerland and the U.S. to exempt financial institutions from certain FATCA reporting requirements regarding confidential client accounts held by Swiss attorneys. The new exemption applies to client funds held in escrow accounts by Swiss attorneys and notaries in the ordinary course of business, e.g., prior to the distribution of an estate, after the settlement of a lawsuit and the like. For the full story, please visit Daily Tax Report's website (subscription required).

Excerpt taken from the article.

"This is not about what we would consider in the U.S. to be matters protected under the attorney-client privilege," said Scott Michel, a partner at Caplin & Drysdale Chartered in Washington. "It's more about the fact that Swiss lawyers engage with their clients in perfectly legal but confidential transactions."

The new amendment to Annex II of FATCA specifies that Swiss banks don't have to identify the clients of accounts held by lawyers or notaries as long as they provide written verification that the accounts fall under the scope of application of the exception clause.

Not a ‘Loophole.'

Switzerland's State Secretariat for International Financial Matters (SIF) said the new exemption will "absolutely not" enable lawyers to facilitate tax evasion.

"The lawyer or notary has to declare in writing that the accounts fulfill the requirements," SIF spokeswoman Anne Cesard told Bloomberg BNA. "It would constitute a criminal offense under Swiss law to provide false information."

Michel told Bloomberg BNA that he didn't expect the exemption to attract abuse. "I don't think this is a huge loophole that you would see banks or lawyers try to drive a truck through," he said

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2019 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)