The government's dismissal of a criminal information against UBS filed in Florida-- United States v. UBS AG, No. 09-600333-CR-COHN, Dismissal of Information, Oct 22, 2010-- leaves the tax cognoscienti wondering what the next step in its fight against secret offshore bank accounts will be. Bryan Skarlatos of Kostelanetz & Fink says that "the UBS case was the beginning of the end of Swiss bank secrecy. We don't know whether it's the beginning of the end of IRS activity, or only the beginning." BNA Daily Tax RealTime, (Oct. 25, 2010).
It is questionable whether the UBS case and Swiss changes to information releases are sufficient to call it the "beginning of the end of Swiss bank secrecy." But it is likely that the government isn't finished with the topic, and that the information received through the reporting process will be tapped to target other banks and jurisdictions on the issue. As Skarlatos noted, "the real question is whether another shoe is going to drop" or whether there will be "different strategies" going forward. BNA Daily Tax RealTime, Oct. 25, 2010.
Switzerland and the UK have agreed to negotiated a new tax agreement requiring withholding on behalf of the UK on assets of UK nationals in Swiss banks and supposedly also a better provision for cooperation in tax evasion cases. It will be interesting to see where this is five years from now--will wealthy Americans still be able to hide their assets in Swiss banks because the IRS can't get the information unless it already has enough information? My colleage Mike McIntyre has written about the inadequacies of information exchange provisions when the government doesn't already know considerable particular information about tax evasion in progress. See McIntyre, How to End the Charade of Information Exchange, Tax Notes (Nov. 9, 2009) (noting that banking secrecy is "not over yet").