Swiss bank accounts held by Americans are likely to become as transparent as your telephone records. The year 2009 has seen the voluntary reporting of nearly 15,000 formerly undeclared offshore accounts owned by Americans, most of them in Switzerland. This tectonic shift seems to have begun with a single whistle-blower, an American who worked in the upper echelons of major Swiss banks for 15 years.

The backdrop is that the world has an estimated $7 trillion dollars in offshore bank accounts. Of this, perhaps 27 percent (about $2 trillion) resides in Swiss banks. The rest is thought to be in such tax havens as Hong Kong, Liechtenstein, and the Cayman Islands.

In terms of U.S. tax revenue, an estimated $100 billion a year goes uncollected as a result of evasion via off-shore accounts.

Switzerland had been the bellwether offshore bank location for privacy. Its reputation goes back at least to 1934, when the Swiss government imposed secrecy on accounts owned by foreigners in Switzerland as a way of resisting Nazi attempts to keep track of German holdings in other countries.

In recent years, Swiss banks have come under rising pressure by foreign governments to open their books. Since 2001, for example, the U.S. has sought to collect taxes on American accounts held offshore by means of the Qualified Intermediary (QI) program. Some 95 percentof Swiss banks participate, or all but the smallest local banks. Until now, this has allowed Swiss banks to pay taxes to the IRS without revealing the identities of the American account holders—in what amounted to an “honor system.”

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