Settlement talks continuing in UBS-IRS case

— -- A judge for the third time delayed a hearing over IRS demands for the names of 52,000 wealthy American clients of Swiss banking giant UBS on Friday after attorneys for the U.S. Justice Department and the bank said they need more time to negotiate.

"There are still some issues that remain to be resolved," Stuart Gibson, a Justice Department tax division attorney, told U.S. District Judge Alan Gold in Miami. "The parties are working through these issues and plan to continue talking."

Gold scheduled an Aug. 12 telephone status conference at the request of both sides in the closely watched case that has threatened to add new cracks to Switzerland's historic reputation for banking secrecy.

"By then we would hope to have worked through the remaining issues, and have initialed a written agreement," said Gibson. "If the parties have not reached agreement, we would expect to be able to report where the parties are in their discussions, or whether they have been unable to reach an agreement."

If the two sides are unable to strike a deal, Gold said he would schedule a key evidentiary hearing in the case either later this month or in mid-September.

There was no immediate comment from UBS, the Swiss government or the Justice Department on the postponement, the second in as many weeks. Gibson had told the judge on July 31 that both sides had reached "an agreement in principle on the major issues."

The Justice Department and IRS argue that UBS must turn over the client data because many of the bank's American clients have evaded millions of dollars in federal taxes with the bank's active assistance.

UBS in February agreed to pay $780 million in a settlement that deferred prosecution of charges that it repeatedly sent its bankers on secret trips to the U.S. to help American customers place their assets in offshore accounts that would not be reported to the IRS.

UBS, however, has contended that disclosing the client data would be a criminal violation of Swiss banking secrecy laws. Backing that position, the Swiss government has raised the possibility that it would seize the client data to prevent any handover ordered by a U.S. court.