Washington, DC and Miami, Florida (GenevaLunch) – The US Internal Revenue Service  is seeking  documents from Swiss bank UBS in Zurich to obtain information about US citizens with UBS accounts. The period covered is 2002 to 2007. The Treasury Department has filed the request with judges in Florida, asking for "John Doe summonses," meaning the IRS is seeking possible tax fraud information about bank clients whose identity is not known. The request stems from the guilty charges filed 23 June in Florida by former UBS manager Bradley Birkenfeld, who has reportedly said UBS harbours up to $20 million in tax evasion money for its clients.

Bloomberg reports that many US citizens with money in the bank "may opt to pay back taxes rather than risk a criminal investigation." IRS Commissioner Doug Shulman is quoted by CNN as implying these funds are "offshore accounts," a label that could prompt new confusion about Switzerland as a tax haven, irritating the Swiss government, which has taken pains in its negotiations with the European Union to point out that it is not a tax haven. The Swiss government is actively cooperating with the US investigation. If the IRS succeeds in obtaining information, this would be "the first summons by the US against a foreign bank," according to Bloomberg, but its article does not explain a key point: under Swiss law tax evasion is not a serious crime, but tax fraud is and banking secrecy can be lifted if Swiss authorities agree there is enough evidence to warrant it.

Swiss government fact sheet on banking laws: Download bkl_factbanking_secrecy_faqs_feb06.pdf

Bloomberg quotes at length Jack Blum, who represents Heinrich Kieber, a whistleblower who is now seeking his share of recovered US tax payments money.

In another fraud case involving foreigners, Switzerland agreed Monday to extradite a Russian businessman accused of swindling a state shipping company for CHF407 million, ending an 18-month legal wrangle.

Related stories: Financial Times Zurich correspondent Haig Simonian, "UBS tells unit staff to avoid US visits," 27 May 2008 and "UBS faces legal move on tax evaders," 1 July 2008. Note that the FT requires registration to view the articles, which are free, but registration is very quick and the information they ask for is minimal.

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