Monday, April 27, 2009

Get in Line Brother #5

We have previously blogged here the Department of Justice initiative to squeeze UBS for its alleged illegal assistance to U.S. taxpayers' tax evasion. The Wall Street Journal Law Blog reports here that, incident to the new negotiation of a tax treaty with the U.S., the Swiss Government wants relief for past sins (as well as continuing to hide the names of its clients). Specifically, it wants the DOJ John Doe Summons case dropped.

Here are the pertinent parts of a press release:

Meeting between President Merzand
the US Secretary of the Treasury
Timothy Geithner

Bern, 25.04.2009 -- Today President Merz met the US Secretary of the
Treasury Timothy Geithner on the fringes of the Annual Meetings of the Bretton Woods institutions in Washington. Mainly bilateral issues were discussed.

The focus of the discussions was the forthcoming negotiations between Switzerland and the US on a new double taxation agreement. resident Merz outlined to Treasury Secretary Geithner the decision of the Federal Council to extend international cooperation on tax issues and, to this end, to fully adopt the OECD standard. The negotiations on the new double taxation agreement will start in Bern on 28 April.

The situation concerning UBS in the US was also discussed during the meeting. In particular President Merz raised the issue of the pending civil action against UBS, through which the US tax authority, the IRS, is requesting the release of a large amount of data on clients. He expressed his hope to the US Treasury Secretary that a solution can be found for this matter no later than when the new double taxation agreement is to be put before parliament. There was agreement that a solution should be found rapidly which is equitable to both sides.

* * * *

Adresse für Rückfragen:
Roland Meier,
FDF Press spokesman,
tel. 079 208 12 87

In addition, independent of the UBS John Doe Summons initiative, Tax Notes Today reports that the IRS claims to already have the names of more than 250 tax evaders using offshore accounts and that there will be further initiatives beyond UBS.

I don't know the likelihood of the relief UBS is seeking. Those potentially at risk for these off-shore adventures with UBS as well as other foreign banks or intermediaries still have to face the very real and pressing question of whether to do a voluntary disclosure while waiting for this manna to fall from heaven (if it ever does or, if it does, it is less tasty than imagined). Taxpayers can get certainty at a significant financial cost via voluntary disclosure. Get in Line Brother.

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