UBS Group (AG - Get Report) has agreed to provide the records on a U.S. client's Singapore account to the Internal Revenue Service as the Department of Justice continues to crack down on Swiss banks in relation to overseas tax evasion. The agreement ends a legal battle between the IRS and UBS that began in 2013 when the IRS first issued a summons to UBS.
The IRS filed a petition in February asking a federal judge in Miami to make the Swiss bank procure account records on Ching-Ye Hsiaw in order to determine his tax liabilities from 2006 to 2011, Bloomberg reported on Wednesday. Hsiaw is currently living in China and had an account in Singapore from 2001 to 2011.
On Wednesday, the Justice Department said it was dismissing the petition as UBS released the records on May 31 and June 10.
"The Department of Justice and the IRS are committed to making sure that offshore tax evasion is detected and dealt with appropriately," Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division said in a statement Wednesday. "One critical component of that effort is making sure that the IRS has all of the information it needs to audit taxpayers with offshore assets."
UBS had originally refused to produce the requested information when asked in 2013, citing Singapore's bank laws preventing disclosure without Hsiaw's permission, according to a court filing. The Justice Department said Hsiaw, who currently lives in China, transferred funds from a Switzerland-based account with UBS to a Singapore branch in 2002.
"UBS confirms that it complied with the summons based on client consent in accordance with Singapore law," said a UBS spokesperson in an email.
Foreign banks -- specifically Swiss banks -- have a history of aiding US clients evade taxes. UBS was first investigated by US regulatory authorities in 2008 for matters related to tax evasion. The Swiss bank paying $780 million in fines and other penalties the following year.
Credit Suisse (CS - Get Report) agreed to pay $2.6 billion to regulators over tax evasion two years ago following a investigation by the US Justice Department. The bank settled and entered a plea agreement, promising to close the accounts of U.S. clients who do not report their assets for tax purposes.
On Wednesday, The Wall Street Journal reported that U.S. authorities are currently investigating whether Credit Suisse's Israel employees were helping dual U.S. and Israeli citizens evade tqaxes, citing people familiar with the matter.