US, UBS agree to postpone hearing on 52,000 account holders

The US Justice Department and UBS AG agreed to postpone a hearing in federal court in Miami on a government lawsuit seeking the identities of 52,000 American account holders suspected of possible tax evasion.

Both sides agreed to reschedule tomorrow’s evidentiary hearing so they could discuss a possible settlement of the case, according to a court filing today. The Swiss government said the case poses a threat to its sovereignty.

Any settlement “would necessarily include a provision requiring UBS to provide the Internal Revenue Service information on a significant number of individuals with UBS accounts,” the Justice Department said in a statement today.

The Justice Department sued UBS on February 19, a day after the bank avoided US prosecution for helping wealthy Americans evade taxes. The US effort to enforce a summons seeking the names would force UBS to violate Swiss laws barring disclosure of such data, the Swiss had said.

UBS agreed on February 18 to pay $780 million in penalties, admitted it helped taxpayers hide money in Swiss accounts and gave the Internal Revenue Service more than 250 clients’ names. The bank and Switzerland have since argued that the US lawsuit represents a threat to Swiss sovereignty.

US District Judge Alan Gold had scheduled a hearing for tomorrow. If the parties do not resolve the case, an evidentiary hearing would be set for August 3 and 4, according to today’s filing.