On Aug. 1, 2016, the Israel Tax Authority announced that it has received information on over 8,000 Israeli clients with foreign bank accounts in Switzerland. The receipt of this list has major tax implications for Israeli citizens who are required to report foreign bank accounts to the Israel Tax Authority. Moreover, this will have additional tax implications from a U.S. tax perspective for dual Israeli-United States citizens who are on this list and who may not be in compliance with their U.S. reporting obligations, as it is likely that the information provided to Israel will find its way to U.S. tax authorities.

According to Greenberg Traurig shareholders Barbara Kaplan (Co-Chair, Global Tax Practice; Chair, New York Tax Practice) and Kenneth Zuckerbrot, this should be a reminder that tax secrecy is a thing of the past. Those with undisclosed assets who are also subject to U.S. tax are at risk of multiple penalties from both Israel and the United States, and are additionally in danger of losing their U.S. passports if they owe more than $50,000 in taxes that remain unpaid.

Fortunately, there are still opportunities to mitigate this risk in the United States.