More than 14,700 U.S. taxpayers have come forward to report previously undisclosed foreign bank accounts under the voluntary disclosure program implemented following the settlements of civil and criminal cases against Swiss banking giant UBS AG (UBS), the U.S. Internal Revenue Service and the U.S. Justice Department revealed Tuesday.
Within the United States, there has been an unprecedented increase in the number of taxpayers who have come forward to voluntarily disclose the existence of their foreign bank accounts and agree to pay tens of millions of dollars to the treasury, the Justice Department and IRS said in a statement.
The voluntary disclosure program began after UBS handed over the names of over 250 account holders as part of a criminal settlement in February. The Swiss banking giant paid $780 million in fines, penalties, interest, and restitution as part of that agreement. The program ended last month.
In August, UBS said it would give the IRS details on 4,450 accounts suspected of holding undeclared assets. The information was to be turned over due to a tax treaty between Switzerland and the U.S. that mandates UBS turn over the information.
Meanwhile, Switzerland's Federal Department of Justice and Police on Tuesday released the criteria for granting assistance under the treaty request. It also said that the official assistance that Switzerland is providing to the US tax authorities in connection with the UBS affair is on track.
According to the criteria, where there is a reasonable suspicion of "tax fraud or the like", the US treaty request covers US-domiciled clients of UBS who directly held and beneficially owned undisclosed custody accounts and banking deposit accounts in excess of 1 million Swiss Francs at any point in time between 2001 and 2008.
It also covers US persons, irrespective of their domicile, who beneficially owned offshore company accounts established or maintained between 2001 and 2008, where there is a reasonable suspicion of "tax fraud or the like."
Further investigations are ongoing in both categories to establish whether "tax fraud or the like" has been committed under the terms of the tax treaty.
Under the terms of the agreement, the Swiss Federal Tax Administration must evaluate the 4,450 UBS accounts by the end of August 2010.
UBS on Tuesday revealed its strategy to return to profitability and meet medium-term financial targets, saying it expects to achieve an annual pre-tax profit of around 15 billion Swiss Francs over the next three to five years.
Speaking at the investor meet, Oswald Grübel, Chief Executive Officer, UBS Group said, "We are building a new UBS: one that performs to the highest standards and behaves with integrity and honesty; one that distinguishes itself not only through the clarity and reliability of the advice and services it provides but in how it manages and executes. "
UBS shares are currently trading on the NYSE at $16.58, down 77 cents or 4.41%.
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