By Kim Dixon
WASHINGTON, Jan 29 (Reuters) – The Swiss court ruling in favor of a U.S. client who stashed funds in a UBS account sets a higher hurdle to aggressive efforts by the U.S. government to go after other banks helping wealthy tax cheats — but the banks are not out of the woods yet.
A Swiss court ruled last week that the client’s failure to file a tax form did not constitute “fraud or the like,” a requirement for data to be revealed under a double taxation agreement with the United States.
The ruling puts in jeopardy Switzerland’s delivery of 4,450 UBS client accounts to U.S. authorities, as agreed in August.
Caught in the crosshairs are other foreign banks the U.S. says it is informally examining for possibly helping U.S. tax cheats. A voluntary amnesty program for those with undeclared income turned up accounts at Credit Suisse, Julius Baer and HSBC, among others.
“It presents a serious roadblock to pursuing other banks,” said Peter Henning, law professor at Wayne State University and a former criminal division attorney at the Justice Department.