UBS must release data on 4,500 suspected tax cheats
— -- For generations of investors, the promise of Swiss bank secrecy represented virtually a "sacred institution" able to withstand all would-be challengers, including Hitler's military might, says William Sharp, a tax attorney whose Tampa law firm represents dozens of Swiss banking clients.
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"From an American tax perspective, the days of traditional Swiss banking secrecy are clearly over when it comes to accounts involving allegations of improper behavior," Sharp said in a phone interview from Zurich. "We're already seeing a rippling effect to other Swiss banks, and maybe even some non-Swiss banks."
The settlement of the closely watched tax battle requires Swiss authorities to "review and process" requests for account information at other Swiss financial institutions in cases with a similar "pattern of facts and circumstances" involving clients suspected of hiding income or assets offshore.
That provision sets the stage for authorities in the U.S. and other nations to seek account information from Credit Suisse and other Swiss banks, said Martin Press, a tax attorney whose Fort Lauderdale firm represents numerous Swiss banking clients.
IRS Commissioner Douglas Shulman said the unprecedented deal provides for disclosure of UBS accounts that at one point held an estimated $18 billion in assets. He declined to say how much the IRS expects to recover in back taxes, interest and penalties once the data are turned over.
"I believe this agreement gives us what we wanted — access to information about those UBS account holders most likely to have been involved in offshore tax evasion," said Shulman during a telephone news conference with reporters.
Saying the agreement helps resolve one of the bank's "most pressing issues," UBS Chairman Kaspar Villiger said the banking giant "welcomes the fact that the information-exchange objectives of the settlement can be achieved in a lawful manner under the existing treaty framework between Switzerland and the United States."
