The Corporate Law Group

Scofflaw?

We have been following a fight between UBS and the IRS. The IRS wants the names of UBS accountholders who are not paying their US taxes and UBS is asserting Swiss law making it criminally illegal to give up those names. The Internal Revenue Service sued UBS to try and force the bank to turn over information about 52,000 account holders the agency says have $14.8 billion in assets and are using Swiss bank secrecy to illegally evade paying US taxes. We guess that this current era of non-hegemony ends at the pocket book. UBS asked that a Miami federal judge deny the IRS petition. The Swiss government weighed in that the IRS case might threaten an intended Swiss-US tax treaty being negotiated: “There can be no question that the Swiss interest in enforcement of its financial privacy laws is strong and legitimate…In contrast to some other countries’ financial privacy laws, the laws of Switzerland impose criminal, as opposed to merely civil, liability on those responsible for violations.” UBS quoted from the US Supreme Court case M/S Bremen v. Zapata Off-Shore Corp. 407 U.S. 1, 9 (1072) that, “[w]e cannot trade and commerce in world markets…exclusively on our terms, governed by our laws, and resolved in our courts.” Sounds good to us IRS.
Paul Marotta

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