UBS agrees to provide details of 4,450 accounts to the IRS
By Devlin Barrett and Stephen Ohlemacher |
August 20, 2009, Thursday
|
Print Edition
Print Edition
SWISS banking giant UBS AG agreed yesterday to turn over to the United States Internal Revenue Service the details of 4,450 accounts suspected of holding undeclared assets by American customers, ending an intense legal fight.
IRS Commissioner Doug Shulman said the accounts held US$18 billion in assets at one time. Many have since been closed, he said.
The deal will give the IRS thousands of long-sought account names, and is expected to provide even more UBS clients who voluntarily disclose their financial details to the agency, Shulman said.
UBS has an estimated 52,000 accounts of US customers. The IRS chief said the 4,450 accounts being relinquished were the ones most suspected of containing undeclared assets.
"I believe this agreement gives us what we wanted - access to information about those UBS account holders most likely to have been involved in offshore tax evasion," Shulman said.
He said that other account holders appear to be in compliance with US tax laws.
The two sides told a federal judge last week that they had reached a tentative agreement, but the details were not released until yesterday.
The Swiss Bankers Association issued a statement in support of the agreement.
"The out-of-court agreement avoids a prolonged legal battle that would have had an uncertain outcome, and UBS can now continue with its consolidation process free of this legal uncertainty," the association said.
Swiss Justice Minister Eveline Widmer-Schlumpf told a news conference in the capital of Bern that the deal lifts the threat of criminal prosecution against UBS, which could have endangered the bank's very existence and dealt a severe blow to the Alpine nation's economy.
"There was no alternative to this solution," she said.
Affected UBS customers can challenge the hand-over of their names before Switzerland's Federal Administrative Court, Widmer-Schlumpf said, noting that this ensured that existing Swiss law "remains untouched."
The IRS has the right to resume its legal fight if names are withheld, Shulman said.
IRS Commissioner Doug Shulman said the accounts held US$18 billion in assets at one time. Many have since been closed, he said.
The deal will give the IRS thousands of long-sought account names, and is expected to provide even more UBS clients who voluntarily disclose their financial details to the agency, Shulman said.
UBS has an estimated 52,000 accounts of US customers. The IRS chief said the 4,450 accounts being relinquished were the ones most suspected of containing undeclared assets.
"I believe this agreement gives us what we wanted - access to information about those UBS account holders most likely to have been involved in offshore tax evasion," Shulman said.
He said that other account holders appear to be in compliance with US tax laws.
The two sides told a federal judge last week that they had reached a tentative agreement, but the details were not released until yesterday.
The Swiss Bankers Association issued a statement in support of the agreement.
"The out-of-court agreement avoids a prolonged legal battle that would have had an uncertain outcome, and UBS can now continue with its consolidation process free of this legal uncertainty," the association said.
Swiss Justice Minister Eveline Widmer-Schlumpf told a news conference in the capital of Bern that the deal lifts the threat of criminal prosecution against UBS, which could have endangered the bank's very existence and dealt a severe blow to the Alpine nation's economy.
"There was no alternative to this solution," she said.
Affected UBS customers can challenge the hand-over of their names before Switzerland's Federal Administrative Court, Widmer-Schlumpf said, noting that this ensured that existing Swiss law "remains untouched."
The IRS has the right to resume its legal fight if names are withheld, Shulman said.
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