There was bad news today for the tax man. The lower house of the Swiss parliament voted down an agreement between the U.S. and the Swiss bank UBS. The deal would have had the bank give up the names of more than 4,000 American account holders who Uncle Sam says owe taxes. Today’s development keeps Switzerland’s reputation as a tax haven intact and leaves the U.S. Treasury short billions of dollars.
By Alisa Roth
Nobody really expected things to turn out this way, except maybe the alleged tax evaders.
Martin Press is a tax lawyer, who does a lot of work with offshore banking cases. He says the account holders have been gambling the Swiss wouldn’t rat them out.
“So far, that group, they are winners, because they have not turned over any names,” said Press.
Press says the account holders are probably in the clear. It’s in Switzerland’s interest not to give them up, because Switzerland’s banking business depends on confidentiality.
But if this is good news for the account holders, it’s not for UBS. David Spencer is a lawyer who works with the Tax Justice Network. He says the U.S. agreed not to penalize the bank, if it turned over the names. Now that deal might be off.
“That litigation against UBS could conceivably continue, in which the penalties could be quite severe, including UBS losing its license to engage in banking in the United States,” said Spencer.
The IRS has already collected some of the missing taxes through an amnesty program last year.
Michael Knoll is a law professor at the University of Pennsylvania. He says this is about the money. But it’s also about sending a message to the banks and the account holders.
“It took a number of years, but at the end of the day UBS gave us the names, so you ought not to do this,” said Knoll.
Even if the Swiss Parliament finally agrees to let UBS release the names, a referendum could still block the ruling.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.