The US Justice Department asked a federal court in Miami 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, Reuters reports.
The department says 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 19 June, 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 says. UBS says 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,” says UBS spokeswoman Rohini Pragasam.
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,” says John DiCicco, deputy assistant attorney general of the department’s tax division “However, we are prepared to seek enforcement if that process is not successful.”