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IRS Withdraws Tax Probe of UBS Over Secret Accounts

Tuesday, 16 Nov 2010 10:05 AM

The U.S. Internal Revenue Service dropped its demand for the identities of Americans who hold secret offshore bank accounts at UBS AG, after concluding it has the names of more than 7,500 names of the customers.

IRS Commissioner Douglas Shulman said the agency was withdrawing its “John Doe” summons against the Swiss bank. Shulman said the IRS investigation has prompted voluntary disclosures by 18,000 Americans, including thousands with accounts at other banks.

About 3,000 Americans have come forward in the year since the IRS ended an official program to grant some leniency for voluntary disclosures, Shulman said in a statement.

“We are finding that many of these voluntary disclosure cases involve significant amounts of previously unpaid tax,” Shulman said. So far, he said the agency has collected on average $200,000 in taxes, penalties and interest per case.

The IRS began its investigation into UBS in June 2008 after a former banker, Bradley Birkenfeld, pleaded guilty to conspiracy and said the bank helped wealthy U.S. citizens conceal $20 billion in assets and evade income tax laws.

Shulman said the IRS already has received the identities of 4,000 UBS customers and expects the final count to exceed 7,500.

“When people cheat on their taxes, the vast majority of honest U.S. taxpayers suffer the consequences and have to make up the difference,” Shulman said. “We will tirelessly pursue anyone who tries to use international borders to their advantage and cheat honest taxpayers.”

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