Judge: Feds Can Access Americans' Swiss Accounts
Federal judge OK'd request to probe secret accounts of alleged U.S. tax evaders.
July 1, 2008— -- A federal judge in Miami has approved a request from the Justice Department and the IRS seeking access to information about American holders of secret Swiss bank accounts.
The accounts at UBS AG hold an estimated $20 billion that has allegedly been hidden to avoid paying U.S. taxes.
"The order clears the way for the IRS to take the next steps against wealthy individuals who don't pay their taxes," IRS commissioner Doug Shulman said in a statement. "People should take notice that the secrecy surrounding these accounts is rapidly fading."
The joint Justice Department-IRS request, filed Monday at the federal court in Miami, sought permission for the IRS to authorize "John Doe" summonses against UBS seeking information from the bank. "John Doe" summonses and subpoenas are typically used when the identities of potential suspects are not known.
The judge's order allows federal investigators to obtain U.S. taxpayer bank data from Dec. 2002 through Dec. 31, 2007, but Shulman indicated that this latest step in the investigation might only be the beginning.
"The John Doe effort may help determine future actions in other areas," his statement added. "We will be taking additional steps to ferret out offshore tax avoidance beyond today's announcement involving UBS."
UBS spokesman Kris Kagel said Tuesday that the bank is aware of the judge's order and that the bank is cooperating with federal investigators.
"UBS looks forward to working with the IRS to address the summons. As we have noted, UBS takes this matter very seriously and is working diligently with both Swiss and U.S. government authorities, consistent with Swiss law and the legal frameworks for intergovernmental cooperation and assistance," his statement said.
The federal government's request came just 10 days after former UBS banker Bradley Birkenfeld pleaded guilty to conspiracy to assist his U.S. clients to avoid paying federal income and other taxes to the IRS.
Court records submitted as part of his guilty plea indicate Birkenfeld organized numerous schemes to assist his clients, including buying jewels, artwork and luxury items with funds from the Swiss accounts, while overseas, and using Swiss bank credit cards, claiming the records could not be traced by U.S. authorities.
