Well, so much for honor among thieves, at least as the U.S. government defines the t-word. Swiss bankers felt they had no choice but to violate the two greatest things in life. But this time, the allegations were quite a bit more serious than selling cigarettes without a retail permit, and there was no grinning mob lawyer to make the whole thing go away. They compiled a list of alleged tax violators and then published that list, both in the Swiss federal newspaper and on the Internet.

Since 1934, Switzerland’s banking privacy law has made it a magnet for foreign accounts and a story element in countless film noires. But judges and lawmakers have been chipping away at the law for a number of decades, and according to some observers, near-relentless pressure from the government’s six-year Foreign Account Tax Compliance Act crackdown may signal the end of an era. We’ll get back to that in a minute.

Highlights and Lowlights

There have been a few respites from the storm, most notably Raoul Weil’s acquittal last November. But his former bosses at UBS had already been hit with about $780 million in fines, and other big Swiss banks were either emptying their wallets or living in the IRS’ crosshairs.

Other names have been printed as well. Last year, French footballer Marcel Deasilly was featured in the Swiss government gazette as opposed to ESPN The Magazine. Other names have appeared as well, but always on an ad-hoc basis. The recent publication was the first large-scale and all-inclusive list.

Francisco Jose Ortiz von Bismarck (yes, that von Bismarck) was one of the first names on the list. Each named person has thirty days to appeal and have their names removed from The List, but lots of luck with that.

The Germans are particularly irked about the whole affair, and not solely because of Herr von Bismarck. “The fight against tax evasion is not about pillorying individuals, but about giving the majority of honest tax payers a sense of justice,” according to one German finance minister. I couldn’t agree more, but no one in the IRS called to ask me what I think.

Ripples in the Pond

When you drop a large rock into a pool of calm water, ripples appear and spread and eventually they will touch the entire surface of that pond, drastically changing its appearance. And the FATCA rock was a very big one indeed.

Switzerland will participate in an automatic tax exchange program beginning in 2018. Even earlier, in 2017, the Swiss will participate in a similar program that’s limited to EU countries. So, if you’re looking for banking privacy, you may want to seriously consider your mattress.

What It Means to You

As we’ve pointed out before, the Offshore Voluntary Disclosure Program is not exactly a get-out-of-jail free card, but it may be the next best thing. It allows you to partner with experienced counsel upfront, so you can have an advocate every step of the way as opposed to waiting until things get hairy. You’ll also avoid the stigma of “lawyering up,” which to many auditors is tantamount to a confession.

The OVDP was modified last year to make it more “flexible,” in the words of Commissioner John Koskinen. In layman’s terms, the Service is a little more willing to make a deal now than it was six years ago.

The reason is simple. The IRS wants to end FATCA with a bang, and the only measure of success is the number of taxpayers who step forward and the amount of money collected. And as we’ve talked about repeatedly, it’s much better to knock on the Service’s door than have them come to you.