The UBS banking secrecy case is one that never stops providing sustenance for a tax blog. First we had the revelations about thousands of secret accounts that had not been handled as required under UBS's qualified intermediary agreement, and a deferred prosecution on the basis of an agreement to hand over thousands of account names. Then we had the step back, as the Swiss objected that the handover would would violate Swiss laws on banking secrecy and a Swiss court ruled in agreement. After much feinting and shifting, the Swiss parliament ratified the agreement, essentially making it a legally binding treaty between the two countries.
Under the agreement, US account holders were given the right to challenge the turning over of their account information under Swiss law. I've wondered how that would turn out. It seemed that if the agreement is now legally binding, it would be quite difficult for a US account holder to construct a case that would nonetheless merit a decision protecting the client information.
Well, now we know. On July 15, the Swiss Federal Administrative Tribunal issued a ruling rejecting the US complainant's challenge to a decision to hand account details to US authorities. See the ruling, made public for the first time today, here (in German). According to BNA, there are about 100 additional challenges awaiting a ruling from the same court--"a court spokesman said that ...the large marority are similar to the case decided by the court on July 15."
That's good news. Cheating on taxes shouldn't pay. The decision means that US taxpayers who had hoped to use the court as a shield are likely not to succeed and they will now face large penalties, likely of several times the full amount in the accounts.
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