The U.S. and Swiss governments have agreed on most major disputes in Washington's effort to get names of thousands of wealthy Americans suspected of evading taxes by hiding billions in assets with Swiss banking giant
UBS AG.
Details were not immediately revealed, but U.S. Justice Department tax attorney Stuart Gibson told a federal judge in a conference call Friday that the settlement would likely be finalized within a week. A trial in the case set to begin Monday was canceled pending that agreement.
"The parties have reached an agreement in principle on the major issues," Gibson told U.S. District Judge Alan S. Gold. "There are some other issues that need to be resolved."
Lawyers for the Swiss government and
UBS, also on the conference call, did not comment. Gold scheduled another telephone hearing for Aug. 7 to go over any final agreement.
The news comes the same day U.S. Secretary of State Hillary Clinton and Switzerland's foreign minister, Micheline Calmy-Rey, were scheduled to discuss the
UBS case and related issues in Washington. Announcement of a deal was somewhat surprising, given that Gibson told Gold on Wednesday the two sides were far apart.
In brief remarks to reporters at the State Department, Clinton and Calmy-Rey expressed pleasure at the announced agreement in Miami.
"There's been an agreement in principle," Clinton said. She offered no details. "Our governments have worked very hard on this to reach this point," she said.
Calmy-Rey said she was "very satisfied" with the agreement but did not elaborate.
The case, in which the U.S.
Internal Revenue Service is taking on centuries of Swiss banking secrecy tradition, involves some 52,000 U.S. taxpayers believed to be hiding about $15 billion in assets in
UBS accounts. The IRS wants Gold to order the Zurich-based bank to turn over those names so it can collect taxes — and so the Justice Department can prosecute them for tax evasion.
UBS and the Swiss government, however, insist they cannot reveal the names without committing crimes in Switzerland. The Swiss have threatened to block disclosure even if Gold were to order the identities released to U.S. authorities.
The Justice Department indicated that any deal would have to include disclosure of some taxpayer names and would likely include a large penalty against
UBS, which has some 34,000 employees and contract workers in the U.S.
Earlier this year,
UBS admitted assisting U.S. citizens in evading taxes as part of a deferred prosecution agreement with the Justice Department.
UBS agreed to disclose the names of about 300 American clients and pay a $780 million penalty. The IRS subsequently filed its case seeking the 52,000 additional names.
So far, three
UBS customers whose names were given to U.S. authorities under the prior agreement have pleaded guilty to tax charges in federal court. Hundreds of others with secret accounts at
UBS and other Swiss banks have voluntarily come forward to the IRS under an amnesty program that requires payment of taxes and penalties but generally does not include the threat of prison.
That amnesty program ends Sept. 23.
