Judge: IRS can seek tax information from Swiss banking giant UBS in expanding investigation
Associated Press WorldStream via NewsEdge :
MIAMI_A federal judge agreed Tuesday to allow the IRS to serve legal papers on Swiss banking giant UBS AG in an expanding investigation into U.S. taxpayers who may have used overseas accounts to hide assets and avoid taxes.
The order from U.S. District Judge Joan Lenard came one day after the Justice Department requested authority for the IRS to issue “John Doe” summons to UBS . The summons are used in IRS tax fraud investigations when the identity of the people involved is not known.
Lenard said in a two-paragraph order that based on the government court filings, “there is a reasonable basis for believing such a group or class of persons may fail or may have failed to comply” with U.S. tax laws.
“The order clears the way for the IRS to take the next steps against wealthy individuals who don’t pay their taxes,” said IRS Commissioner Doug Shulman in a written statement. “People with hidden foreign accounts can no long rest easy.”
UBS has said it is cooperating with Swiss and U.S. investigations and will disclose records involving U.S. clients who might have broken tax laws.
U.S. taxpayers are required to report all foreign financial accounts if their total value exceeds $10,000 at any point during a given year, prosecutors said. Failure to report the accounts can result in a penalty of up to 50 percent of the amount in the accounts.
The Justice Department requested the summons after former UBS private banker Bradley Birkenfeld, 43, pleaded guilty in a Florida federal court to defrauding the IRS . Birkenfeld, who is cooperating with investigators, said in court that UBS has about $20 billion in assets in undeclared accounts for U.S. taxpayers.
Prosecutors said Birkenfeld and others helped California billionaire Igor Olenicoff hide $200 million in assets overseas. Olenicoff, who controls a real estate empire, pleaded guilty last year to tax charges and agreed to pay the IRS more than $52 million.