UBS US Case Agreement Revealed

August 20, 2009 International Tax CooperationOffshore BankingTaxation in SwitzerlandTaxation in USA  No comments

The US Senate and the Swiss bank UBS, have revealed details of their tax evasion case agreement.

An end has come to the long running legal dispute between the Inland Revenue Service (IRS) and UBS, an agreement has been reached, the details of which have now been revealed. The data behind 4,450 accounts held by US residents with UBS will be handed over to the IRS, all connected with tax evasion suspicions. Current IRS valuations of assets held in the accounts are at approximately US$18 billion, if valued at their peak over the last six years. No word has yet come from the IRS as to penalties that will be charged to any found to be evading tax, although, no possibility of a new leniency programs has yet been voiced by the IRS. Although, the IRS currently has in place a self-declaration leniency program lasting until the 23rd of September.

Notification letters will be sent to the account holders on the 26th of August. The individuals are able to apply for the current leniency program beforehand, or wait to see if their name is one of the 4,450. If no self-declaration is made, and a letter is received prosecution and penalties will follow typical IRS tax evasion procedure.

The case, which has put an unprecedented amount of pressure on Swiss privacy laws, might yet lead to further legal action. It is believed that the data provided by UBS, and any possible cooperation on the part of those prosecuted, could lead to the discovery of tax evasion promoting third parties. The Swiss government has also stated that they are willing to consider the possibility of US investigation of banks other than UBS.

Douglas Shulman, U.S. Internal Revenue Service Commissioner, commenting on the agreement, said “It’s clearly a victory for the U.S. government to gain access to a nook and cranny of the financial system that we haven’t been able to gain access to in the past.”

Leave a reply