This Wall Street Journal sides with UBS in its efforts to resist the demands of the US government that the Swiss bank turn over the names of 52,0000 US citizens with Swiss bank accounts. The Journal explains that this is really nothing more than a “fishing expedition” that violates a 30 year old U.S.-Swiss treaty on sharing tax information.
But its wrong to consider this a battle between the US and the Swiss. The government’s case against UBS was settled back in February. The real targets of the IRS are tens of thousands of U.S. taxpayers, whose financial information the government is demand only because they bank in Switzerland. So hold off on calling the cheese with holes in it Freedom Cheese just yet.
The Journal hints that this might be unconstitutional, violating the Fourth Amendment’s guarantees against unreasonable seaches and seizures. It’s not just that the innocent are being dragged in with the guilty. It’s that people who the government has not even made a specific allegation are having their financial dealings with the Swiss pulled into the clutches of the IRS.
As the Journal puts it:
This is not to say that everyone caught up in the IRS’s dragnet is pure. But the American system of justice contains probable cause and reasonable search requirements precisely to prevent law enforcement from rounding up everyone who might conceivably be guilty of some crime. And while Justice argues that UBS systematically marketed its private banking services in order to avoid U.S. taxation, the charges against UBS itself were settled in February, so this is not about the bank. It is about its customers, and an effort to grab perhaps a couple of billion dollars in allegedly unpaid taxes.
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