The Internal Revenue Service has ended a long-lasting civil action against UBS AG, marking the end of a significant phase of efforts to crack down on tax fraud through hidden foreign accounts. Although the legal action against UBS has been concluded, the IRS plans to use information gathered to pursue U.S. clients of other banks, such as HSBC Holdings PLC, based in London.
The UBS case was brought to a close following the agreement by the Swiss government to provide the names of U.S. customers of UBS in Switzerland. Four thousand such names were given to the IRS following an August 2009 deal, and ultimately 7,500 names are expected to be provided.
In addition to the names procured through the course of the civil action against UBS, the IRS received an additional 18,000 names of U.S. taxpayers with secret accounts abroad since the implementation of a program offering unspecified leniency. While that program has ended, The Wall Street Journal reports that IRS Commissioner Doug Shulman has signaled the possibility of another such program, “although with higher penalties than for the first group.”