UBS Tax Settlement Delayed on U.S., Switzerland Talks

Aug. 7 (Bloomberg) -- The U.S. and Switzerland need at least five more days to negotiate settlement of a Justice Department lawsuit against UBS AG. The DOJ and IRS are seeking the names of Americans suspected of evading taxes through 52,000 secret Swiss accounts.

U.S. District Judge Alan Gold in Miami today agreed to a request by Justice Department attorney Stuart Gibson to reschedule another telephone conference call for Aug. 12. The two governments had agreed in principle to settle the case and hoped to reveal final terms today.

Tax lawyers said they expect UBS to disclose thousands of accounts after giving the Internal Revenue Service data on 250 clients on Feb. 18. UBS has agreed to pay $780 million to defer prosecution for aiding tax evasion.

Since then, three UBS clients have pleaded guilty in the U.S. to hiding their bank assets from the IRS. Thousands have avoided prosecution by voluntarily disclosing their accounts to the IRS under a program that ends Sept. 23. The pace of future disclosures may hinge on the accord. 

Seizure Threat 

In the past month, Switzerland negotiated on behalf of the bank, arguing that the U.S. demands would force UBS bankers to violate Swiss criminal laws protecting account secrecy.

Admissions of Wrongdoing 

The U.S. sued UBS for the account data on Feb. 19, a day after the bank admitted its Swiss private bankers helped wealthy Americans evade U.S. taxes from 2000 to 2007. UBS also admitted setting up sham companies in havens such as the British Virgin Islands, Hong Kong and Panama.

Aside from UBS’s admissions of wrongdoing, one banker pleaded guilty and cooperated with prosecutors. Another was indicted and declared a fugitive, and a third who ran the now- shuttered cross-border business was held by the U.S. as a material witness for several months last year.

The case is U.S. v. UBS AG, 09-cv-20423, U.S. District Court, Southern District of Florida (Miami).

See the complete story at http://www.bloomberg.com/apps/news?pid=20601085&sid=a4b7n_puxpDQ

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