Tax Haven Banks and U. S. Tax Compliance – Obtaining the Names of U.S. Clients with Swiss Accounts

The Permanent Subcommittee on Investigations hearing, “Tax Haven Banks and U. S. Tax Compliance – Obtaining the Names of U.S. Clients with Swiss Accounts,” was a continuation of the Subcommittee’s examination of financial institutions which are located in offshore tax havens and which use practices that facilitate tax evasion and other misconduct by U.S. clients. One of the banks featured in a July 2008 hearing on this topic is UBS, a major financial institution headquartered in Switzerland. The hearing examined issues related to a John Doe summons served by the IRS on UBS seeking the names of U.S. clients with UBS Swiss accounts that have not been disclosed to the IRS. In July, UBS representatives estimated that about 19,000 U.S. clients had about $18 billion in assets in such Swiss accounts. The hearing examined a recent deferred prosecution agreement involving UBS, the status of the John Doe summons, the role of U.S.-Swiss tax and legal assistance treaties, and the effect of Swiss secrecy laws on U.S. information requests.

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