The large Union Bank of Switzerland (UBS) has been ordered to disclose information to American legal authorities regarding approximately 52,000 American customers. These people have undeclared bank accounts in Switzerland. A related charge was filed in the U.S. District Court in Miami, Florida.
The Internal Revenue Service (IRS), which is responsible for the collection of taxes in the United States, has initiated civil proceedings against the large Swiss bank UBS. The bank stated that it is supposed to hand over information on numerous clients. UBS wants to fight this order.
On the day after the filing of this unprecedented civil charge, a bank spokesman stated that the IRS was demanding the release of information on numerous American UBS customers who keep bank accounts in Switzerland. These accounts have not been disclosed to the IRS. The summons, a so-called “John Doe summons,” which focuses on people whose identities are unknown, had already been lodged with the U.S. District Court in Miami last July. Now the order will be enforced legally.
Violation of U.S. Tax Law
According to reports in the United States, this issue involves up to 52,000 Americans who conceal their Swiss UBS bank accounts from the IRS and, by doing so, are in violation of US tax law. The accounts in question are, however, protected by Swiss bank secrecy. The UBS spokesman did not comment on this number. UBS did say that it will challenge and fight this charge vigorously. It can do this within the framework of the announced settlement with the US Department of Justice. They have many legal tools at their disposal.
The U.S. Department of Justice is making serious accusations against the bank in the recent complaint. UBS bankers are accused of having approached targeted affluent individuals at company sponsored social gatherings. The Justice Department went on to mention on its website that UBS representatives made nearly 4000 annual trips to the United States specifically to contact customers there. This was verified by UBS documents.
Initiation of Contact at UBS Events
The website indicated that UBS trained their employees so that they could prevent the discovery of their wheeling and dealing by the appropriate authorities.
Documents also showed that many contacts were made at sporting and cultural events sponsored by UBS. These events were specifically geared toward “extremely affluent Americans.”
The complaint goes on to say that the bank was aware of the illegality of its activities. UBS helped hundreds of American taxpayers set up off-shore companies to evade taxes. The court in Miami has to make a ruling on the Justice Department’s access to the accounts.
On Wednesday, UBS was giving way to American investigatory authorities in their long simmering tax battle. In this way, the world’s largest wealth manager is avoiding an immediate and threatening formal prosecution.
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