NEW JERSEY - UBS Group has ended a legal fight with the Internal Revenue Service, agreeing to hand over records on an American client's account in Singapore as US authorities seek to move beyond Switzerland in their fight against offshore tax evasion.
The case involves Ching-Ye Hsiaw, a US citizen living in China who had an account in Singapore from 2001 to 2011.
On Feb 23, the IRS filed a petition asking a federal judge in Miami to force UBS, the largest Swiss bank, to produce account records on Hsiaw. The IRS said it needed the records to determine Hsiaw's income tax liabilities from 2006 to 2011.
After reaching an agreement, the bank handed over records on May 31 and June 10, the Justice Department said Tuesday in a court filing dismissing the petition.
"The Department of Justice and the IRS are committed to making sure that offshore tax evasion is detected and dealt with appropriately," Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division said in a statement Wednesday, according to Bloomberg.
"One critical component of that effort is making sure that the IRS has all of the information it needs to audit taxpayers with offshore assets."
The US has focused largely on Switzerland since 2008 as it has fought offshore tax evasion. More than 80 Swiss banks, including UBS and Credit Suisse Group AG, have agreed to pay a total of US$5 billion (S$6.7 billion) or so in penalties and fines.
The question is where the IRS and the Justice Department will turn next as they sift through a trove of data gathered from Swiss banks and from more than 50,000 US taxpayers who disclosed their accounts to avoid prosecution.
“UBS confirms that it complied with the summons based on client consent in accordance with Singapore law,” Ms Marsha Askins, a UBS spokeswoman, said in an e-mail.
IRS agents served a summons on UBS in 2013 for records of Hsiaw's UBS account from 2001 to 2011. Hsiaw transferred his account to Singapore in 2002, according to the Justice Department.
The bank said it couldn't produce the information because Singapore's bank secrecy laws prevent disclosure without permission from Hsiaw, which he hadn't provided, according to a court filing.
"Even if Singapore's bank secrecy laws, as UBS contends, precludes disclosure of the summoned bank records relating or pertaining to Hsiaw's Singapore account(s), international comity requires that the records be disclosed," IRS revenue agent James Oertel said in the Feb 23 petition.
In response to media queries, the Monetary Authority of Singapore spokesman said: "Singapore’s laws and regulations do not prohibit sharing of information for investigations into possible tax offences.
"Banking information could be disclosed through client’s consent or Singapore mutual legal assistance.”