UBS and the IRS finally struck a deal. But they're not telling us exactly what it is.
The Swiss banking giant, that country's officials and U.S. tax investigators had been at odds over whether UBS would be forced to turn over client data on
as many as 52,000 undeclared accounts that the IRS believes were opened to shelter money from taxes.
The top man at the IRS promises we'll learn more soon.
"We are pleased to have initialed an agreement with the Swiss government which protects the United States government's interests. We will release more details when the Swiss government signs the agreement as early as next week," Commissioner Douglas Shulman said after the deal was announced. Those two sentences were his complete official statement.
But just how much more we, or the IRS, will find out is still the big question.
Prosecution previously delayed: In February, UBS agreed to pay $780 million to defer
prosecution for aiding tax evasion. The bank also handed over info on 250 clients. So far, three UBS customers have pleaded guilty to hiding their bank assets from the IRS.
Will U.S. tax officials get the scoop on UBS' other 51,750 customers in question?
Probably not.
Speculation among tax lawyers is that UBS will reveal the identities of between 5,000 and 10,000 of its clients.
As for the larger issue of offshore accounts, the UBS-IRS resolution could affect other Swiss banks depending on the extent that Swiss bank secrecy has been compromised.
PIRG pleased: U.S. PIRG, the nonprofit, nonpartisan federation of state Public Interest Research Groups,
lauded the agreement as a good beginning.
"The settlement of the case between UBS and U.S regulators
represents an initial step in bringing the issue of offshore tax
secrecy to light. More importantly, it shows the need to address sham
transactions, tax avoidance and tax evasion on a permanent basis," said Nicole Tichon, Federal Tax and Budget Reform Analyst
for the U.S. Public Interest Research Group on UBS Tax Case Settlement. "When
banks help to hide billions of dollars for tax dodgers, the rest of the
taxpayers must ultimately pick up the tab."
A recent U.S. PIRG study found that the cost of offshore tax havens could be as as high as $100
billion per year.
Perhaps soon, we'll find out exactly who is helping contribute to that tax loss number.
Additional information: Read more on the super secret international tax deal in the Wall Street Journal, Associated Press, Reuters and Bloomberg.
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