52,000 UBS customers hid accounts from IRS

As many as 52,000 US customers hid their UBS accounts for the government in violation of tax laws, according to the Justice Department.

The US government filed a lawsuit against UBS, Switzerland’s biggest bank, ordering it to disclose to the Internal Revenue Service (IRS) the identities of US customers with secret Swiss accounts holding about $14.8bn in assets.

Court documents allege that US citizens failed to report and pay U.S. income taxes on income earned in those secret accounts.

The lawsuit claims UBS engaged in cross-border securities transactions that it knew violated US security laws and helped rich Americans set up dummy offshore companies. The government also claimed that UBS trained its bankers to avoid detection by the authorities.

"At a time when millions of Americans are losing their jobs, their homes and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civic and legal duty to pay taxes," said John DiCicco, assistant attorney general for the Justice Department's Tax Division.

UBS said it would challenge the enforcement of the so called John Doe summons, which seeks information on the accounts of US citizens at UBS in Switzerland, whose information is protected from disclosure by Swiss financial privacy laws.