The US tax authority (IRS) fully and definitively withdrew, on 15 November 2010, the “John Doe” Summons served on Swiss bank UBS. The move followed the last substantial delivery of administrative assistance cases to the US by Switzerland.
By the end of August, the Swiss Federal Tax Administration (FTA) had examined approximately 4,450 UBS client accounts under the agreement with the US. The delivery of data by Switzerland to the US was largely completed by mid-November after expiry of the appeal periods. Overall, approximately 4,000 cases have been supplied to the US to date.
The examinations conducted and information handed over by the FTA were based on an administrative assistance agreement with the US, signed on 19 August 2009, which "defined the criteria for examining the administrative assistance request concerning tax offenses."
In July 2008, the US court had given the IRS authority to issue the "John Doe Summons" to the UBS, requiring the Swiss bank to hand over information on its U.S. clients suspected of evading US taxes.
The Summons demanded information about US taxpayers who held accounts at UBS between 2002 and 2007, with an estimation of more than 50,000 US citizens on the list.
With the issuing of the Summons, the UBS was placed in to a dilemma between the US tax authority and the Swiss law on banking secrecy.
The John Doe Summons are orders issued by the IRS to a third party to provide information on an unnamed, unknown taxpayer with potential tax liability.
Subject to the outcome of pending appeals before the Swiss Administrative Court or in the case of no appeals, information on a number of additional accounts covered by the administrative assistance agreement will be delivered to the IRS over the course of the coming months.
For more information and advice on tax contact The Sovereign Group.
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