The Justice Department is pressing UBS for the names of suspected tax dodgers with secret bank accounts in Switzerland, the New York Times reports. Federal authorities believe the Swiss bank may have helped up to 20,000 Americans stash $20 billion in offshore accounts, evading hundreds of millions in taxes. The investigation threatens to rock the Swiss banking system, which has tightly guarded its secrets since the Middle Ages.
Tax avoidance is legal in Switzerland, and UBS has come under pressure not to turn over the names of its clients to American authorities. Court papers filed by US prosecutors yesterday asked a judge to force UBS to provide records of American taxpayers who hide their accounts from the IRS. If the request is approved, a legal showdown between the banking giant and federal authorities could be on the way.