UBS, IRS agree to settle out of court

MIAMI, July 31 (UPI) -- The United States and Switzerland have reached agreement on bank secrecy issues in matters in which U.S. citizens are thought to be hiding funds to avoid taxes.

"There's been an agreement in principle," said U.S. Secretary of State Hillary Clinton after meeting with Micheline Calmy-Rey, Switzerland's chief of the Federal Department of Foreign Affairs.

A U.S. government lawyer said the Justice Department and Switzerland agreed to settle out of court a ground-breaking tax case against UBS bank involving the U.S. government's demand for the bank to release the names of 52,000 U.S. citizens who hid assets from the Internal Revenue Service in the Swiss bank.

UBS paid $780 million to settle criminal charges in February. Although the Swiss government has said it would abide by international guidelines on tax cases, it also said it is against Swiss law to reveal names of bank account-holders.

"Our governments have worked very hard on this to reach that point, and so we're very pleased that the announcement was made (Friday) morning," Clinton said.

Calmy-Rey said Swiss officials also were "very satisfied" with the news concerning UBS.

Justice Department attorney Stuart Gibson said he expected out-of-court negotiations would resolve the issue by Aug. 7, The New York Times reported.

Judge Alan Gold canceled the trial that would have begun Monday in the U.S. District Court in Miami.