UBS to turn over information on 4,450 U.S. holders of Swiss-based accounts. The IRS says it will get information on "substantially all of the accounts that it was interested in when it initiated the John Doe summons against UBS" to prise from the bank the names of U.S. owners of Switzerland-based UBS accounts in aid of a U.S. probe into systemic tax evasion.

"Under the agreement, the IRS will submit a treaty request to the Swiss government describing the accounts for which it is requesting information," the IRS says in a press release. "The Swiss government will then direct UBS to initiate procedures to turn over information on thousands of accounts to the IRS."

The agreement was signed today in Washington, D.C., and entered into force immediately.

4,450 accounts

Though the IRS doesn't specify how many accounts are covered in the accord, Swiss authorities do.

"Switzerland has undertaken to process the new treaty request, concerning approximately 4,450 accounts, within a year," the Swiss government says in a press release. "These are the terms of the agreement between Switzerland and the U.S.A. to settle the looming conflict between the two nations' legal systems."

Originally U.S. authorities were after information on 52,000 account holders -- a number bruited about in press reports and today confirmed by the Swiss government. Subsequent reports suggested that an agreement would be for disclosure on a much lower number -- 5,000 by some recent accounts, 4,000 by others.

Last February the IRS asked a U.S. federal court in Miami to order UBS to provide it with information on U.S. taxpayers with Swiss bank accounts.

The Swiss government got involved shortly afterward because it viewed the fulfillment of such a request as a violation of the traditions and laws of Swiss banking -- and a potential shock to its economy. About 12% of Switzerland's GDP comes from banking.

"The privacy of all of the persons concerned remains protected under the law, and they may contest the [Swiss Federal Tax Administration's] final decisions before the Federal Administrative Court," the Swiss government says of its accord with the U.S. in its release today.

The Federal Admistrative Court is a Swiss entity.

Zurich-based UBS says it "will send notices to affected US persons encouraging them to participate in the IRS's voluntary disclosure practice."

UBS also emphasizes that the accord between the Swiss and U.S. governments "does not call for any payment by UBS."

Last winter UBS admitted having helped a couple of hundred U.S. clients evade taxes-- and it wound up having to pay the U.S. $780 million in fines.

The Swiss government insists that foreign governments are not entitled to use tax-information-sharing agreements to go on "fishing expeditions" for possible tax evaders.

Tax evasion isn't a crime in Switzerland, though fraud is. -FWR

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