WebCPA reports that Switzerland’s Federal Administrative Court has ruled that the agreement between Switzerland and the US requiring UBS to disclose the names of more than 4,000 American taxpayer investors violates Swiss bank secrecy laws:
The ruling last Friday on 26 sets of bank accounts threatens a deal that the Swiss and U.S. governments hammered out last August after a prolonged legal dispute. The Swiss government has not yet handed over the 4,450 names to the U.S. government. The Swiss Federal Tax Administration has been reviewing the cases and decided about 600 to date.
Last February, UBS agreed to pay $780 million to the Justice Department and hand over 255 accounts of U.S. based taxpayers to avoid prosecution. However, the same Swiss court ruled earlier this month that that deal was also a violation of Switzerland’s banking secrecy laws.
The impasse may be solved by amending the tax treaty between the U.S. and Swiss governments, but the agreement would have to be approved by the Swiss parliament. So far, about 14,700 U.S. taxpayers have come forward to reveal their offshore bank account holdings as part of a voluntary disclosure program, according to the IRS, but it is unclear how many of them held accounts at UBS.
“We have every expectation that the Swiss government will continue to honor the terms of the agreement,” the IRS said in a statement.
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