U.S. Tax Authorities Lean On UBS for Disclosures
A high-stakes federal trial in which the U.S. government tries to force Swiss banking giant UBS to turn over the names of Americans suspected of tax evasion has been delayed. Both sides agreed to a trial postponement until early August.
There is widespread speculation that the Internal Revenue Service and UBS are negotiating a settlement that could include a fine and the release of some of the names of the 52,000 Americans suspected of evading taxes with secret accounts at the bank headquartered in Zurich, Switzerland.
UBS has stated it will refuse to release the names even if ordered to do so by trial judge Alan S. Gold of the Federal District Court in Miami, Florida. The Swiss government announced it would stop USB from releasing the names; such a release would constitute a breach of Swiss banking laws, it says.
The IRS sued USB in February to force disclosure of the names of wealthy Americans suspected of using UBS’s offshore private banking division to evade U.S. taxes. The lawsuit was filed a day after the wealth management company agreed to pay $780 million to settle criminal accusations that it had defrauded the IRS by allowing Americans to hide billions of dollars in income. UBS also turned over the names of about 250 American account holders.
Some American UBS clients have over the past nine months pursued amnesty through an IRS voluntary disclosure program. It allows U.S. citizens to avoid criminal penalties if they acknowledge tax evasion and pay back taxes and penalties. The amnesty program ends in September.
U.S. tax law requires taxpayers to report financial accounts in any foreign country if the total value of the accounts exceeds $10,000 at any time.