BERNE/WASHINGTON, (Reuters) – Switzerland has agreed to reveal the names of about 4,450 wealthy American clients of UBS AG to U.S. authorities in a tax dispute settlement that pierces Swiss banking secrecy and now threatens to spill over to other banks. The deal promises to end years of investigation and uncertainty for UBS, the world’s second-largest wealth manager. The Swiss government announced later yesterday it was exiting the 9 percent stake it had taken to aid UBS during the financial crisis.
With Switzerland’s famed banking secrecy under fire, the Swiss have also agreed to process requests by the United States seeking information from banks besides UBS about account holders suspected of evading U.S. taxes. “This announcement today should send a signal, no matter what institution you’re with, the IRS is willing to pursue both the institution and the individual,” Internal Revenue Service Commissioner Doug Shulman told reporters.
The accounts were at one time worth $18 billion, Shulman said, though he could not provide a current figure.
U.S. authorities declined to name any other foreign banks being probed, but the IRS is expected to use the Swiss deal as a template to pursue further prosecutions.
“The IRS is now gaining institutional skill and knowledge in how to pursue these types of cases and they’re going to use that. This is, I believe, the beginning and not the end,” said Peter Hardy, a former federal prosecutor and specialist in white-collar crime at Post & Schell in Philadelphia.
