It was reported that on June 23, 2016 that the UBS Group AG has ended a legal fight with the Internal Revenue Service, agreeing to hand over records on an American client’s account in Singapore as U.S. authorities seek to move beyond Switzerland in their fight against offshore tax evasion.
The case involves information that the IRS sought on the account from 2001 to 2011 for Ching-Ye Hsiaw, a U.S. citizen living in China.
On Feb. 23, the agency filed a petition asking a federal judge in Miami to force UBS, the largest Swiss bank, to produce account records on Hsiaw. The IRS said it needed the records to determine Hsiaw’s income tax liabilities from 2006 to 2011.
After reaching an agreement, the bank handed over records on May 31 and June 10, the Justice Department said Tuesday in a court filing dismissing the petition.
- “The Department of Justice and the IRS are committed to making sure that offshore tax evasion is detected and dealt with appropriately,” Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division said Wednesday in a statement.
- “One critical component of that effort is making sure that the IRS has all of the information it needs to audit taxpayers with offshore assets.”
The U.S. has focused largely on Switzerland since 2008 as it has fought offshore tax evasion.
More than 80 Swiss banks, including UBS and Credit Suisse Group AG, have agreed to pay a total of about $5 billion in penalties and fines.
The question is where the IRS and the Justice Department will turn next as they sift through a trove of data gathered from Swiss banks and from more than 50,000 U.S. taxpayers who disclosed their accounts to avoid prosecution.
- “UBS confirms that it complied with the summons based on client consent in accordance with Singapore law,” Marsha Askins, a UBS spokeswoman, said in an e-mail.
IRS agents served a summons on UBS in 2013 for the records.
- Hsiaw had $990,351 in his UBS account in Switzerland in 2001, and closed that the next year, transferring $194,356 to his Singapore account in 2002, according to the IRS petition.
- The bank said it couldn’t produce the information because Singapore’s bank-secrecy laws prevent disclosure without permission from Hsiaw, which he hadn’t provided, according to a court filing.
Singapore’s laws and regulations don’t prohibit sharing of information for investigations into possible tax offenses, and banking information could be disclosed through client’s consent or Singapore mutual legal assistance, according to the city state’s central bank.
- “Even if Singapore’s bank secrecy laws, as UBS contends, precludes disclosure of the summoned bank records relating or pertaining to Hsiaw’s Singapore account(s), international comity requires that the records be disclosed,” IRS revenue agent James Oertel said in the Feb. 23 petition.
The case is U.S. v. UBS, 16-mc-20653, U.S. District Court, Southern District of Florida (Miami).
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