Following up on my previous blog Swiss Lower House Rejects UBS Pact
, the lower house of Parliament approved a bill that would allow the Swiss government to hand over the names of alleged tax dodgers to the U.S. Internal Revenue Service (IRS).
Swiss bank UBS admitted it had used the accounts to help thousands of Americans evade taxes on about $20 billion of income. Under the settlement's terms, the Swiss government must hand over the names of 4,450 American account holders to the U.S. IRS by August.
This law would allow the Swiss government to fulfill its obligations under a U.S.-Swiss settlement of a tax case last year involving hidden UBS offshore accounts.
However, this Swiss legislation is jeopardized by the inclusion of a clause making the proposed law conditional to a popular referendum. Swiss lawmakers have less than a week to resolve this issue.
A referendum would make it impossible for Switzerland to meet the August deadline to hand over the names to the U.S. IRS because it would take months to conduct a signature drive to launch a popular vote.
The U.S. government said it is prepared to reopen the case against UBS if the Swiss miss the August deadline. The Swiss government has argued against a referendum.