UBS AG, Switzerland’s largest bank is being sued by the US government in an effort to force disclosure of the identities of as many as 52,000 American customers who allegedly hid their secret Swiss accounts from US tax authorities.
US customers had 32,940 secret accounts containing cash and 20,877 accounts holding securities, according to the Justice Department lawsuit filed yesterday in federal court in Miami.
US customers failed to report and pay US taxes on income earned in those accounts, which held about $14.8 billion in assets during the middle of this decade, according to the court filing.
“At a time when millions of Americans are losing their jobs, their homes and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civic and legal duty to pay taxes,” John A DiCicco, acting assistant attorney general in the Justice Department’s tax division, said in a statement.
UBS’s US listed shares fell 14 cents, or 1.3 per cent, to $10.43 on the news. The lawsuit came a day after UBS agreed to pay $780 million and disclose the names of about 250 account holders to avoid US prosecution on a charge that it helped thousands of wealthy Americans evade taxes.
The US and Zurich-based UBS disagreed over how many account holders the bank must disclose to the Internal Revenue Service, agreeing to resolve it in court. Summons Enforcement
With yesterday’s lawsuit, the US asked a federal judge to enforce its so-called John Doe summonses.
On July 1st, a federal judge in Miami approved an IRS summons seeking information on thousands of UBS accounts owned or controlled by US citizens.
Negotiations between the US, Switzerland and UBS have been at a standstill since then, according to a Justice Department filing.
UBS said in a statement that it expected yesterday’s filing. “UBS believes it has substantial defenses” to the US attempt to enforce the summonses and will “vigorously contest” the case, the bank said in the statement.
Bloomberg