TAX NEWS - June 2010

Swiss Tax: Swiss Parliament Clears the Way for Handover of U.S. tax dodgers

For U.S. tax dodgers with Swiss accounts, the game may soon be up.

Switzerland's parliament voted yesterday to allow banking giant UBS to hand over the names of 4,450 Americans with Swiss offshore accounts to the Internal Revenue Service as part of an IRS tax evasion probe. Click here for NYT story. Here for WSJ.

It's a watershed moment in the U.S. government's efforts to clamp down on tax evaders seeking harbor in the traditional secrecy of Swiss bank regulations, and it's an outcome that seemed in doubt as recently as last week.

A quick refresher: UBS, the nation's largest bank by assets, had agreed to hand over the names last summer as part of a settlement with U.S. authorities. But a Swiss court ruled in January that the handover could not proceed unless it got a green light from parliament, and in recent weeks, the prospect of a national referendum on the issue threatened to delay the process beyond the August 24 deadline set for the bank's compliance.

But now the clock is fast running out for tax dodgers with UBS accounts, and the accord is poised to have repercussions for other banks as well. The Times quotes an unnamed source briefed on the matter who says U.S. authorities plan to request names of suspected tax cheats at other Swiss banks, and tax attorney Barbara Kaplan of Greenberg Traurig LLP told the Journal that U.S. citizens from non-UBS banks are already coming forward.