US court ruling to challenge Swiss bank secrecy
Appeals court rules that foreign bank accounts are not protected by fifth amendment
US TAX authorities have won a battle in their fight against tax evasion after the federal appeals court ruled a former UBS client must turn their bank records over to a grand jury.
The accused, identified only as MH, is the target of an investigation into whether or not they used a Swiss bank account to evade taxes, Bloomberg reports.
A three-judge panel ruled that the fifth amendment to the US constitution, which protects the individual from attesting against themself, does not cover foreign bank account records. Under the Bank Secrecy Act, MH must keep records of the names and numbers of each account, the name and address of each bank and the maximum values of each account.
Ben Jones, an associate in the Tax Group of international law firm Eversheds, said that the US is pursuing tax evasion through Swiss offshore accounts “with the full force of available domestic law”. This is in contrast to the UK and Germany’s “arguably more practical approach of negotiating tax information sharing and collection agreements with the Swiss authorities”.
“These agreements represent a compromise that the US does not currently seem to consider acceptable,” he added. “For example, it is anticipated that the UK’s forthcoming agreement with Switzerland will impose significant tax charges on UK residents with Swiss accounts.
“Importantly however, the Swiss banks would be able to maintain the highly valued anonymity of their clients; the UK would not know who holds the accounts on which the tax is levied.”
The deal between the UK and Switzerland is expected to be announced later today.
