U.S. submits new request to Swiss on alleged tax cheats

Reuters News
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Posted: Aug 03, 2012 10:39 AM
U.S. submits new request to Swiss on alleged tax cheats

ZURICH (Reuters) - The United States has submitted a fresh request to Switzerland for information on former clients of Credit Suisse suspected of cheating on their U.S. taxes, after an earlier attempt was blocked by a Swiss court, the bank said on Friday.

The two countries have for years been locked in a conflict over the fact that wealthy Americans are dodging taxes by hiding money in Swiss accounts. Washington is pressuring banks in Switzerland to divulge their names and financial details.

A spokesman for the Swiss Federal Tax Administration said it had received a request for administrative assistance from the United States on July 9, but that he could give no further details such as the name of any bank concerned.

Eleven Swiss banks including Credit Suisse and Julius Baer are under investigation in the United States for aiding U.S. citizens who are suspected of dodging taxes.

"I can confirm that it concerns former clients," a spokesman for Credit Suisse said.

Switzerland is trying to get the investigations dropped in return for the payment of fines and the transfer of U.S. client names and is also seeking a deal to shield the remainder of its 300-odd banks from U.S. prosecution.

Mario Tuor, spokesman for the Swiss office in charge of conducting negotiations on the tax deals, was not immediately available for comment.

The U.S. request is likely to be a revised version of one submitted last year, which was ruled void by a Swiss court in April because was based on vaguer criteria that pointed to tax evasion, the court found.

Unlike most countries, Switzerland has distinguished between tax fraud, which is illegal, and tax evasion, which is not. Under a new deal, which has yet to be ratified by the United States, Switzerland would assist U.S. authorities in cases of tax evasion as well as tax fraud.

A spokesman for the court declined to comment on the matter of a revised request from the United States.

Flagship bank UBS agreed in 2009 to hand over names of more than 4,000 of its account holders and pay a $780 million fine to settle criminal charges it helped U.S. citizens dodge taxes.

In an attempt to avoid a repeat of such legal wrangles holding up a new deal, the Swiss parliament approved a plan in February that would allow U.S. officials to request information on suspected tax cheats based solely on their behavior rather than name or bank account number.

(Reporting by Catherine Bosley; Editing by Mark Potter)