U.S., UBS say they have a deal in tax-evasion dispute
The US Justice Dept and Swiss banking giant UBS have reached an agreement on the IRS’s demands for the names of an approximate 52,000 rich Yankee bank clients suspected of tax evasion, both sides told a federal judge Wednesday. “The parties have initialed agreements,” Stuart Gibson, a Justice Dept tax division solicitor, told US District Judge Alan Gold during a morning telephone meeting.
“It will take a bit of time for the agreements to be signed in last form and when the final documents are signed, the parties will file a stipulation” to dismiss the case against UBS. Neither Gibson nor lawyers for UBS provided details on the deal, which settles the closely studied case which has promised to add new cracks to Switzerland’s historical name for banking privacy. IRS Commissioner Douglas Shulman claimed the contract “protects the US central authority’s interests” and that details would be released “when the Swiss presidency signs the contract, as early as next week.”. UBS Boss man Kaspar Villiger declared bank officers “are thankful the 2 executives reached this agreement to decide this issue.” He also thanked the Swiss presidency and its members concerned in negotiating the deal. William Pointy , a Florida tax barrister who represents Yank UBS clients, stated that he expects the accord to permit Swiss authorities to translate bank privacy laws more broadly and permit a “substantial handover” of names.
“I would guess the US wouldn’t enter into this agreement lacking the presence of a major fine and penalty without having at least many hundred or maybe even thousands of names turned over,” Pointy said. And IRS contentions that UBS must give the money info as the clients in query have dodged millions of greenbacks in US taxes with secret help from the bank. UBS in Feb agreed to pay $780 million in a settlement that deferred prosecution of charges that it had regularly sent financiers on surreptitious journeys to the US to help Yankee patrons hide assets in offshore accounts that wouldn’t be reported to the IRS. UBS has disagreed that divulging the customer list would amount to a criminal violation of Swiss banking privacy laws.
The Swiss presidency has raised the likelihood that it might seize customer info to forestall any handover ordered by a US court. On Mon. , the Swiss Federal Council’s 7 members returned early from a booked holiday for a special meeting to debate the legal deadlock. So far, 3 of those clients have confessed to filing fake tax returns. The IRS in March launched a six-month program offering lower penalties to US people who willingly divulge secret offshore assets and agree to repay taxes.
Collusion often means no legal charges will be filed, and needs payment of back taxes and interest for no less than six years, and some penalties. While the IRS has not divulged the collusion rate, the agency asserts there was a dramatic rise in the amount of taxpayers making voluntary disclosures this year. Almost all of the cases involve taxpayers with unreported income in offshore accounts, the IRS says.
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