US judge approves IRS call for Swiss bank records
2 July 2008
WASHINGTON – A US federal judge Tuesday cleared the way for the Internal Revenue Service (IRS) to order information from Switzerland-based bank, UBS AG about US taxpayers who may be using Swiss bank accounts to evade federal income taxes.
The Justice Department filed papers on Monday seeking the order, which authorises the IRS to serve a John Doe summons on the bank.
The IRS uses such summons to obtain information about possible tax fraud by people whose identities are unknown. The John Doe summons approved by the court directs UBS to produce records revealing US taxpayers with accounts at UBS that have been kept from the IRS.
According to the Department of Justice, a statement submitted to the court by former UBS banker Bradley Birkenfeld, UBS employees assisted wealthy US clients in concealing their ownership of assets held offshore by creating "sham entities" and then falsely filing IRS forms claiming the entities as the owners of the accounts.
According to Birkenfelds court statement, UBS had approximately USD 20 billion in assets under management in undeclared" accounts for US taxpayers.
Law requires US taxpayers to report all financial accounts in a foreign country if the total value of the accounts exceeds USD 10,000 at any time during the calendar year.
A "willful failure" to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation, according to the department.
[dpa / Expatica]