A settlement between the U.S. and UBS required the bank to turn over the names of more than 4,000 Americans that had potentially used their Swiss bank accounts as massive tax shelters.
Part of the underlying agreement that allowed the turnover of the names without violating Swiss privacy laws was an admission that the Americans had violated Swiss law by failing to file a U.S. W-9 tax form, The Wall Street Journal reported. But the court said last week not filing the W-9 did not violate Swiss law.
But a ruling by a Swiss court in favour of one of those US clients called into question the legality of the agreement.
WSJ: In a ruling issued Friday in Bern in favour of a U.S. taxpayer, a court panel said UBS AG files on private-bank clients shouldn’t be turned over to U.S. authorities.
The decision could effectively reverse a plank of a settlement struck last year that called for Swiss bank UBS to ultimately provide the identities of 4,450 accounts tied to Americans. It caused reverberations from Washington to Zurich as U.S. officials, UBS, and tax lawyers scrambled to understand how the ruling might affect the settlement.
“This is a major event,” said Florida tax lawyer William M. Sharp Sr., who is representing UBS clients.
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