“A Domestic Subpoena / Summons In An Offshore Asset Search” describes how the IRS and U.S. Department of Justice were granted court permission to serve a “John Doe” summons on UBS AG. This summons was supposed to help the IRS identify assets and / or undeclared revenue hidden by any U.S. taxpayers who were maintaining offshore bank accounts at UBS.
A July 1, 2008 Order had specifically permitted the IRS to serve UBS with the “John Doe” summons which is reproduced below without its attachments:
(Click On Images To Enlarge)
The IRS has however, argued in U.S.A. v. UBS AG, 1:09-cv-20423, that UBS has not fully complied with the summons. In UBS AG, the IRS claims that UBS has disclosed under the summons, just 300 bank accounts out of an estimated 52,000 belonging to U.S. taxpayers who could be tax cheats.
As I stated in my February 27, 2009 “Asset Search News Roundup“, UBS must consider Swiss bank secrecy laws, (a.k.a. professional secrecy laws), when supplying the IRS with account information pursuant to the summons. UBS highlighted the very issue of bank secrecy laws just yesterday, when it filed its “Supplemental Declaration of Professor Isabelle Romy On Swiss Law“. It had also earlier raised this issue via the “Declaration of Professor Isabelle Romy On Swiss Law“, filed April 30, 2009.
Through these declarations, UBS argued that it would be violating Swiss bank secrecy laws if it fully complied with the summons. The IRS meanwhile, claimed that UBS should be compelled to fully comply with the summons because UBS allegedly violated its Qualified Intermediary Agreement with the IRS, for the withholding of taxes. (Declaration of Barry B. Shott, filed February 19, 2009). U.S.A. v. UBS AG, is next scheduled for hearings on July 13, 2009.
Copyright 2009 Fred L. Abrams