swiss bank account

In February, I wrote that the United States was suing Swiss bank UBS in order to get the offshore institution to release the names of the wealthiest 19,000 of the 52,000 American bank account owners. These depositors have managed to evade paying United States income taxes on the interest earned within these foreign accounts.

The New York Times is now reporting that the U.S. Justice Department plans to drop the case due to lobbying pressure from the bank and the Swiss government. Many tax evaders, fearing the bank would release their name publicly, have already come forward to claim the interest they earned and perhaps pay the income tax owed to the government.

Some smaller accounts have been transfered to domestic banks.

Settlement Anticipated in UBS Case, Lunnley Browning, New York Times, June 22, 2009

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If you are one of the many Americans with an offshore bank account with UBS, the largest bank based in Switzerland, your name may be among those reported to the IRS. UBS has admitted that the bank has been conspiring to defraud the United States and the Internal Revenue Service. The bank will pay $780 million to settle the case. From 2002 to 2007, Americans hid a total of $20 billion from the IRS and avoided paying $300 million each year in taxes.

In exchange for protection from indemnity for the bank’s senior executives, UBS is turning over a small percentage of identities from the 19,000 bank accounts under investigation and closing the accounts of its American clients.

The tradition of secrecy within Swiss bank accounts apparently dates back to the Middle Ages.

A Swiss Bank Is Set to Open Its Secret File, Lynnley Browning, New York Times, February 18, 2009.

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