Swiss and U.S. negotiators need more time to finalize a settlement in a high-stakes attempt by the U.S. government to obtain names of suspected American tax evaders from Swiss banking giant UBS AG, a Justice Department attorney told a federal judge Friday.
U.S. District Judge Alan S. Gold set another status hearing for Wednesday and pushed off a trial until Aug. 17. The trial has already been delayed three previous times, and Gold has said it will only take place if a final agreement is not reached.
The Swiss and U.S. governments last week announced an agreement in principle on major issues, with plans to present a final deal at Friday's hearing. But resolving the details has proven more difficult than both sides envisioned.
"There are still some issues that remain to be resolved," Stuart Gibson, the lead Justice Department lawyer in the case, told the judge on a conference call. "The parties are working through these issues and plan to continue talking."
The Internal Revenue Service earlier this year asked Gold to force UBS to turn over names of some 52,000 American clients believed to be hiding nearly $15 billion in assets in secret accounts. UBS and the Swiss government have resisted, arguing that to do so would violate Swiss banking confidentiality laws that date back centuries.
No details have been released of the tentative agreement. Many tax attorneys and experts who closely follow the case expect the deal to require disclosure of a much smaller number of UBS clients. It's unclear if UBS also would be forced to pay a financial penalty.
UBS paid a $780 million penalty earlier this year and turned over names of about 300 American clients in a deferred prosecution agreement with the Justice Department. In that case, UBS admitted helping U.S. citizens evade taxes, which experts say is not a violation of Swiss bank secrecy laws.