Settlement could unlock bank secrecy
The U.S. corporate headquarters of UBS in New York.
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Tess Vigeland: We got details today of the settlement the U.S. and Switzerland reached over secret American accounts held at Swiss bank UBS. Switzerland will turn over information on nearly 5,000 customers. The IRS commissioner says the agreement pierces the veil of bank secrecy and helps crack down on offshore tax evasion. But UBS may just be the start of things. Marketplace's John Dimsdale reports from Washington.
JOHN DIMSDALE: At least Switzerland will still have its mountains and chocolate. But their banks are in for a big change, says IRS Commissioner Doug Shulman.
DOUG SHULMAN: It's a real breakthrough. It's a real sense that the world of bank secrecy is eroding.
Switzerland will settle a tax dispute with the U.S. by handing over the details of 4,450 UBS bank accounts held by Americans. The IRS suspects those Americans squirreled away as much as $18 billion in hidden assets. And Shulman expects to collect even more names and dollars.
SHULMAN: Part of this agreement with the government of Switzerland is if we find similarly situated banks to UBS, that they will cooperate with us in getting names turned over.
The IRS is urging Americans with Swiss bank accounts to voluntarily reveal their assets. Doing so before September 23rd will keep them out of jail. Shulman won't confirm it, but these voluntary disclosures are reportedly turning up secret accounts at other Swiss banks, such as Credit Suisse. CCH analyst Mark Luscombe says that's going to force Swiss banks to look elsewhere for their wealthy customers.
MARK LUSCOMBE: You know they're still serving the U.S. market but not for the purposes they have in the past. For their growth, they're more looking toward the Middle East and Asia.
Luscombe says this could be just the beginning of troubles for Swiss banks. He expects other European tax authorities to start asking for similar disclosures when they see how successful the IRS is in Switzerland.
In Washington, I'm John Dimsdale for Marketplace.