UBS Agreement to Lead to Larger Crackdown on Tax Evasion

An agreement by UBS AG , Switzerland’s largest bank, to reveal data on 4,450 accounts may lead to a larger crackdown on tax evasion by banks and lawyers, said U.S. Internal Revenue Service Commissioner Douglas Shulman .

Photo: UBS Agreement to Lead to Larger Crackdown on Tax Evasion

UBS agreed yesterday to hand over the information to settle a U.S. lawsuit seeking the names of Americans suspected of evading taxes through 52,000 Swiss accounts. The bank will give the material to the Swiss government, which would then determine how much will go to the IRS.

The U.S. sued UBS on Feb. 19, a day after the bank agreed to provide the names of 250 account holders and pay $780 million to avoid prosecution for helping wealthy Americans evade taxes. UBS clients have until Sept. 23 to disclose their accounts and avoid prosecution. The U.S. lawsuit and voluntary disclosures have helped the IRS widen its net beyond UBS, Shulman said , Bloomberg reports.

Meanwhile, divulging the contents of the UBS deal after weeks of speculation about it, Shulman painted the picture in broad strokes. The settlement, he said, will give the IRS an unprecedented amount of information on tax evaders. Further, it shows the agency is determined to work with governments around the globe to catch offenders.

"Wealthy Americans who have hidden their money offshore will find themselves in a jam," he said.

UBS issued a statement outlining details of the settlement, but declined to comment further ,Wall Street Journal reports.

``This is a thoughtful and very clever resolution of the case,'' said William M. Sharp, a Tampa tax attorney who represents customers with accounts at UBS and other Swiss banks. ``The United States is extracting its pound of flesh and yet we are respecting Swiss banking law by going through the treaty process.'', MiamiHerald.com