UBS and U.S. reach deal on releasing client names to IRS

News reports this morning indicate that UBS (UBS) and the U.S, have initialed documents agreeing to a deal to turn over what will likely be thousands of names of UBS clients to the Internal Revenue Service. The actual number has not yet been released, but speculation earlier this week put that number at about 10,000 of 52,000 names that the IRS has asked for.

Federal District Judge Alan Gold had given the two sides until August 7 to agree to a deal or they would be back in court on August 10. Last Friday the two sides told the judge they were close and asked for more time.

The case turned into a major diplomatic incident. U.S. Secretary of State Hillary Clinton met with Swiss foreign minister Micheline Calmy-Rey on July 31. The Swiss had threatened to seize the bank records of UBS if a U.S. court orders the names of banking clients to be released. The IRS wanted the names of 52,000 U.S. citizens or companies that bank with UBS. U.S. tax officials believe that UBS is hiding $20 billion of U.S. taxpayers' money in secret Swiss accounts.