IRS vs. UBS - just the first shot fired in secrecy fight

Lawsuits and allegations are flying back and forth across the Atlantic Ocean as the IRS tries to find unpaid taxes and UBS (UBS) hides behind Swiss secrecy laws that refuse to help. But, UBS is part of the IRS Qualified Intermediary program, which requires UBS to withhold taxes. Under that program, for American clients who do not sign W-9 disclosure forms, UBS generally must withhold 31% of interest income and 16% of dividend income.

In answer to the first successful shot fired by the IRS, UBS volunteered to pay $780 million to settle a claim involving criminal fraud and failure to collect taxes on 17,000 accounts. Now the IRS wants to see 52,000 undeclared accounts of Americans and has filed a lawsuit in Miami federal court. The IRS estimates that $15 billion in assets is kept in those accounts.