Swiss Court Rules Against IRS, Gives Hope to US Taxpayers

Jacob Stein Esq.
March 1, 2010 — 1,420 views  
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On January 22, 2010 the Swiss Federal Administrative Court published its first judgment with respect to the IRS's request for information.  The case relates to a UBS client who failed to provide the bank with a Form W-9.

The Swiss Court ruled against the IRS and stated that no information will be provided by UBS to the IRS.  The judgment is final and is not subject to appeal.  The judgment holds that the US Treasury agreement with the Swiss government dated August 19, 2009 is merely a Memorandum of Understanding, and does not derogate the US/Swiss income tax treaty.  The Court further concluded that the failure to provide the bank with Form W-9 does not amount to tax fraud.

This decision is now persuasive on all other cases pending in Swiss courts with respect to disclosure of information to the IRS on accounts of US citizens.

This decision is good news for US taxpayers, but maybe insufficient in the long run.  It is expected that the Obama administration will continue to exert pressure on the Swiss government to amend the US-Swiss income tax treaty, allowing disclosure of information relating to Swiss bank accounts.  If the tax treaty is amended and the amendment is ratified by the Swiss parliament, this court decision will be moot.

For now, there is a glimmer of hope for US taxpayers with unreported Swiss bank accounts.

For more information on this, please visist our website at

Jacob Stein Esq.


Mr. Stein is a partner with the law firm Boldra, Klueger and Stein, LLP, in Los Angeles, California. The firm's practice is limited to asset protection, domestic and international tax planning, and structuring complex business transactions. The firm's goal is to provide the highest quality legal work that is usually associated with only the biggest law firms, in a boutique firm setting. Jacob received his law degree from the University of Southern California, and his Master's of Law in Taxation from Georgetown University. Mr. Stein has been accredited by the State Bar of California as a Certified Tax Law Specialist and is AV-rated (highest possible rating) by Martindale-Hubbell.