WASHINGTON – The U.S. government said Sunday it is trying to settle its demand that Switzerland’s largest bank turn over information about thousands of Americans suspected of using secret Swiss accounts to evade taxes.
Stepping back from a legal and diplomatic showdown, the U.S. government joined the Swiss government and Swiss banking giant UBS in asking a federal court to postpone a hearing scheduled for today so they can continue settlement talks.
The parties have agreed that any settlement “would necessarily include a provision requiring UBS to provide the Internal Revenue Service information on a significant number of individuals with UBS accounts,” the Justice Department said.
UBS earlier this year admitted that it schemed to defraud the U.S. government by helping American clients hide money from the IRS – for example, by holding their assets in the names of offshore companies. To avoid immediate criminal prosecution, UBS agreed to pay $780 million.
Since then, in a separate court action, the IRS has been trying force UBS to disclose information about Americans believed to have held 52,000 undeclared accounts.
The Swiss have resisted the demand as a “fishing expedition” and a violation of Swiss law. The case threatens to further erode Swiss bank secrecy, a cornerstone of the Swiss economy.