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Government reaches deal to access as many as 5,000 UBS accounts that U.S. investors might have used to avoid taxes.
NEW YORK (CNNMoney.com) -- The Internal Revenue Service announced Wednesday that it has reached a deal with the Swiss government, gaining access to thousands of UBS AG accounts that Americans might have used to avoid paying taxes.
"Thousands of taxpayers who avoided paying taxes in the past are being brought into compliance," said IRS Commissioner Douglas Shulman in a teleconference with reporters. "As this agreement demonstrates, the world of international taxes has dra
An IRS press release stated that 4,450 accounts held by rich American investors were included in the settlement.
In the teleconference, Shulman said the IRS expects to gain access to a total of more than 5,000 UBS (UBS) accounts, through the IRS-UBS settlement, combined with a voluntary disclosure program and "other sources." He said these accounts have held $18 billion in assets at one time, though he did not have a current tally for their value.
A UBS spokeswoman would not comment on the value of the accounts and referred questions to a company press release. In the release, UBS Chairman Kaspar Villiger said the settlement "helps to resolve one of UBS' most pressing issues."
The Swiss government will divest from UBS with immediate effect, it said on its Web site. The government intends to exercise its right to convert all 6 billion Swiss francs of its holding of UBS Mandatory Convertible Notes due 2011 and to place with institutional investors the newly issued UBS shares received upon conversion.
Swiss authorities said the sale showed UBS had found a solid footing again after becoming one of the biggest victims in the credit crisis, and analysts said the tax deal and government exit could herald a recovery at the bank.
The U.S. deal "obviously helps to rebuild UBS's reputation. With that, one of the most threatening items for UBS on the way back to profitability falls away," said Rainer Skierka, analyst at Swiss bank Sarasin.
This particular agreement only covers 4,500 accounts while UBS has something like 50,000+ US clients. jefwane