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IRS Drops Offshore Bank Account Suit Against Swiss Bank

Orange County tax attorneys took note when the IRS announced Thursday that it would drop its court case against the Swiss bank UBS. Apparently the Swiss government prepared to release details on thousands of American clients with offshore bank accounts in Switzerland who are suspected of using their accounts to evade taxes.

So far, the I.R.S. says it has received details on 2,000 American account holders so far and expected to receive information on the remaining 2,450 this fall.

A previous deal had set this Tuesday as the deadline, but apparently the IRS is confident of UBS's intentions to comply with the agreement announced by Swiss officials on Thursday.

The lawsuit has been a burden for UBS, the world's largest private bank, and for Switzerland over offshore bank accounts that allegedly allowed wealthy Americans to evade taxes.

The IRS was threatening to sue UBS for information on over 52,000 account holders, using what is called a John Doe summons.

The IRS said in a statement, "Based on information received to date and assurances by the Swiss government, we anticipate being in a position to withdraw the John Doe summons this fall."

Source: New York Times "I.R.S. to Drop Suit Against UBS Over Tax Havens" August 27, 2010

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