ADVERTISEMENT

US seeks court order for UBS Swiss bank records

Issues

The US Justice Department said it asked a federal court to authorize the Internal Revenue Service to request information from UBS AG about US taxpayers who may be using Swiss bank accounts to evade federal income taxes.

The department said it seeks permission to allow the IRS to serve what is known as a “John Doe” summons on the Zurich-based bank. The summons is used to obtain information about possible tax fraud by people whose identities are unknown.

On June 19, former UBS banker Bradley Birkenfeld pleaded guilty in federal court in Florida to conspiring to defraud the IRS by assisting UBS clients in avoiding US reporting requirements on income in Swiss bank accounts.

According to Birkenfeld's court statement, UBS employees assisted wealthy US clients in concealing their ownership of assets held offshore by creating sham entities and then filing IRS forms falsely claiming the entities owned the accounts.

If approved by the court, the summons will direct UBS to produce records identifying US taxpayers with accounts in Switzerland who elected to have their accounts remain hidden from the IRS, department officials said.

UBS said it was aware that US authorities were seeking a court order for the records.

“UBS takes this matter very seriously and is working diligently with both Swiss and US government authorities, consistent with Swiss law and the legal frameworks for intergovernmental cooperation and assistance,” UBS spokeswoman Rohini Pragasam said in a statement.

Birkenfeld said in court that UBS had about $20 billion of assets under management in “undeclared” accounts for US taxpayers.

The law requires a US taxpayer to report all financial accounts in a foreign country if the total value of the accounts exceeds $10,000 at any time during the calendar year.

“We are working cooperatively with both the Swiss government and UBS to obtain this information. However, we are prepared to seek enforcement if that process is not successful,” Deputy Assistant Attorney General John DiCicco of the department's tax division said in a statement.

IRS Commissioner Doug Shulman said, “The information we gather from this action will help us detect wealthy individuals who don't pay their taxes as well as provide details about how advisors facilitate this abuse.” (Reuters)

ADVERTISEMENT

Digitization, sustainability among characteristics of future... Analysis

Digitization, sustainability among characteristics of future...

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

Magyar Bankholding chairman to serve as CEO as well Appointments

Magyar Bankholding chairman to serve as CEO as well

ITM, capital gov't agree on support for public transport City

ITM, capital gov't agree on support for public transport

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.